Table 2: Factors associated with a decline in sales and employment

||**Sales **|**(decrease) **|**June 2020**||**Employ**|**ment (decr**|**ease) June **|**2020**|
|---|---|---|---|---|---|---|---|---|
||(1)|(2)|(3)|(4)|(5)|(6)|(7)|(8)|
|**Variables in tax admini**<br>Activity<sup>1</sup>|**strative and sur**|**vey data**|||||||
|Retail|0.0449|-0.0151|-0.00125|-0.0136|-0.0149|-0.0155|-0.00484|-0.0327|
||(0.0282)|(0.102)|(0.0990)|(0.0812)|(0.0269)|(0.0925)|(0.0887)|(0.0861)|
|Other|0.0421|0.121**|0.101*|0.0350|0.0101|0.0357|0.0154|-0.0270|
||(0.0276)|(0.0559)|(0.0595)|(0.0540)|(0.0265)|(0.0823)|(0.0674)|(0.0758)|
|Size<sup>2</sup>|||||||||
|Medium|-0.0008|0.0771|0.0576|0.0368|-0.0299|0.111|0.0947|0.0720|
||(0.0207)|(0.0584)|(0.0599)|(0.0519)|(0.0197)|(0.0764)|(0.0673)|(0.0713)|
|Large|-0.0351|-0.0841|-0.128*|-0.0670|-0.0530**|0.0216|0.0541|0.0707|
||(0.0273)|(0.0723)|(0.0755)|(0.0778)|(0.0258)|(0.0689)|(0.0769)|(0.0831)|
|Lusaka|-0.0022|-0.0185|-0.00128|-0.0114|-0.0108|0.00471|-0.0549|-0.0918|
||(0.0191)|(0.0489)|(0.0498)|(0.0483)|(0.0184)|(0.0719)|(0.0570)|(0.0615)|
|Firm age|0.0000008|0.000863|0.00102|0.00002|-0.000008***|0.00385|0.00514|0.00429|
||(0.000002)|(0.00211)|(0.00284)|(0.00268)|(0.000002)|(0.00335)|(0.00315)|(0.00320)|
|**Other baseline survey c**|**haracteristics**||||||||
|Manager experience|||-0.00132|-0.00175|||-0.00241|-0.00283|
||||(0.00302)|(0.00271)|||(0.00325)|(0.00331)|
|Competitive market|||-0.0393|0.00144|||0.0842|0.114|
||||(0.0508)|(0.0474)|||(0.0738)|(0.0747)|
|Introduced new products|||0.0597|0.0362|||-0.172***|-0.208***|
||||(0.0500)|(0.0504)|||(0.0544)|(0.0566)|
|Limited fnance|||-0.0522|0.0157|||0.0942|0.141*|
||||(0.0574)|(0.0496)|||(0.0769)|(0.0791)|
|Trained employees|||0.103*|0.0828|||0.0523|0.0408|
||||(0.0545)|(0.0504)|||(0.0820)|(0.0833)|
|**Information from follo**|**w-up surveys**||||||||
|Changed practices||||-0.0975*||||0.00701|
|||||(0.0499)||||(0.0772)|
|Receive gov support||||-0.270||||0.318|
|||||(0.249)||||(0.256)|
|Observations|2918|578|578|514|2918|578|578|514|

Note: This table is based on Equation (1) in Section 3 of the paper. Columns (1) and (5) present the results for the tax administrative data. Columns (2)-(4) and (6)-(8) present the results for the survey data.<sup>_∗_</sup> _p <_ 0 _._ 1,<sup>_∗∗_</sup> _p <_ 0 _._ 05,<sup>_∗∗∗_</sup> _p <_ 0 _._ 01. 1 The omitted category is manufacturing. 2 The omitted category is Small. _Manager experience:_ Defined as the number of years experience of the top manager in the firm. _Competitive market:_ Dummy variable for whether a firm has had more than five competitors entering their market in the previous two years. _Introduced new products:_ Dummy variable for whether a firm introduced new products in the previous three years. _Limited finance:_ Dummy variable for whether a firm stated that access to finance was a very severe or major obstacle for their business. _Trained employees:_ Dummy variable for whether a firm stated that they offered their permanent employees training. _Changed practices:_ Dummy variable for whether a firm changed their business operations in response to the COVID-19 pandemic. _Receive gov support:_ Dummy variable for whether a firm received some kind of cash support from the government to help deal with impact of the pandemic.

# **4.3.1 Factors associated with a decline in sales and employment levels in 2020**

Table 2 shows that there were key structural factors associated with firms experiencing a decline in sales, but more firm-specific factors emerge regarding declines in employment. A decline in sales was closely correlated with business activities being outside of manufacturing 27