# **Online Appendix**

## **A.1 Additional details on surveys**

We discuss each of the sixteen surveys used in our study, and how firm death is defined and calculated in each. We begin with the multi-purpose household surveys, before turning to specialty firm panel surveys.

## **_Multi-purpose household surveys:_**

## _Indonesian Family Life Survey (IFLS)_

The Indonesian Family Life Survey (IFLS) is a publicly available multi-purpose panel survey of the Indonesian population. It surveys over 7,000 households, consisting of over 30,000 individuals, and is representative of about 83 percent of the Indonesian population. Further details on study design and data can be obtained in Strauss et al. (2016) and online at <u>http://www.rand.org/labor/FLS/IFLS.html. There are currently five waves of data available and</u> our sample draws from IFLS3, which was fielded in 2000, IFLS4 (fielded in 2007/2008) and IFLS-5 (fielded in 2014/2015). Non-farm business modules of IFLS1 and IFLS2 are less detailed, complicating the identification of the business owner as well as the matching of businesses with later rounds, which is why we decided not to include them.

We used the non-farm business modules of the different survey waves to identify household businesses in each of the three waves we included in our sample. A household was coded as operating a business if there was a householder who had worked in a family-owned, non-farm business like trade/retailing or been self-employed in a non-farm enterprise during the past 12 months preceding the survey, which was entirely owned by the household, and still operating at the time of the survey. Owners were identified as those household members who were indicated in the non-farm business module as being primarily responsible for the reported business. Up to two members could be reported per business and their individual survey identification numbers were given, so that information on owner characteristics could be matched from the other survey modules.

Since the IFLS is not a panel of firms, but of households who are asked in each round if they operate a business, it allows us to capture information on firms that were not operating in IFLS3, but in IFLS4. We can thus use two baselines for the analysis of firm dynamics over time, as each round provides us with a sample of firms operating at a given point in time. Taking IFLS3 as baseline, we observe horizons of 7.5 and 14.5 years to IFLS4 and IFLS-5, respectively. We observe a horizon of seven years from IFLS4 to IFLS-5 with IFLS4 as the baseline. Since horizons using IFLS3 and IFLS4 as baseline differ, we do not pool together data for the same observation period with this approach, but increase the sample with information on different horizons.

The non-farm business modules of the IFLS did not ask whether the business reported in a given round is the same as the business reported in the previous round, or what happened to the one reported earlier. We therefore needed to match reported businesses across rounds in order to be able to determine whether the business survived or not, and in the latter case, whether a new firm was started. To simplify this matching exercise, we only kept firms of households who never operated more than one enterprise in any of the three survey rounds in our sample.

Taking IFLS3 [IFLS4] as our baseline, and IFLS4 [IFLS-5] as follow-up round, we then coded the business reported at baseline as surviving, if a business was reported in the follow-up round, and: 39