|In 2020|(0.011)<br>-0.054<sup>***</sup>|(0.011)<br>-0.054<sup>***</sup>|(0.022)<br>-0.106<sup>***</sup>|(0.022)<br>-0.106<sup>***</sup>|(0.015)<br>-0.117<sup>***</sup>|(0.015)<br>-0.117<sup>***</sup>|
|---|---|---|---|---|---|---|
||(0.007)|(0.007)|(0.018)|(0.018)|(0.006)|(0.006)|
|_Panel D:_|||||||
|**Interaction effect**|||||||
|_Central x 2020_|0.021|0.021|0.073|0.073|0.052<sup>**</sup>|0.051<sup>**</sup>|
||(0.020)|(0.020)|(0.048)|(0.048)|(0.022)|(0.022)|
|_Local x 2020_|0.022|0.022|0.081<sup>***</sup>|0.081<sup>***</sup>|0.037<sup>**</sup>|0.037<sup>**</sup>|
||(0.015)|(0.015)|(0.020)|(0.020)|(0.016)|(0.016)|
|**Main effects**|||||||
|_SOE type_|||||||
|_Central_|0.003|-0.000|0.015|0.011|-0.029<sup>***</sup>|-0.032<sup>***</sup>|
||(0.008)|(0.008)|(0.017)|(0.016)|(0.008)|(0.008)|
|_Local_|0.013|0.010|0.038<sup>**</sup>|0.033<sup>*</sup>|-0.023<sup>**</sup>|-0.027<sup>***</sup>|
||(0.012)|(0.012)|(0.017)|(0.017)|(0.009)|(0.009)|
|In 2020|-0.054<sup>***</sup>|-0.054<sup>***</sup>|-0.106<sup>***</sup>|-0.106<sup>***</sup>|-0.117<sup>***</sup>|-0.117<sup>***</sup>|
||(0.007)|(0.007)|(0.018)|(0.018)|(0.006)|(0.006)|
|SOE dummies|Yes|Yes|Yes|Yes|Yes|Yes|
|Age dummies|Yes|Yes|Yes|Yes|Yes|Yes|
|Size dummies|No|No|Yes|Yes|Yes|Yes|
|Subsidies received|No|Yes|No|Yes|No|Yes|
|Industry effects|Yes|Yes|Yes|Yes|Yes|Yes|
|Year effects|Yes|Yes|Yes|Yes|Yes|Yes|
|Observations<sup>**†**</sup>|2,253,381|2,253,381|2,165,653|2,165,653|2,249,388|2,249,388|
|Pseudo/Within R<sup>**†**</sup>|0.018|0.018|0.049|0.049|0.029|0.029|

Source: World Bank staff analysis using Romania MoF firm-level data from 2016-20. The sample includes all firms. Growth is calculated as the difference between the values in year t and t-1 divided by the average of the values in year t and t-1. Wage is labor cost divided by average number of employees. SOE variables are dummy variables taking the value one if national or subnational governments have ownership stake of 10-24.9%, 25-49.9%, or 50% or more, respectively, in the firm. The reference group is private-owned enterprises (POEs), defined as firms where national or subnational governments own 0-9.9%. All models include 2-digit NACE industry and year-fixed effects. Observations in the top and bottom 1 percentile of each two-digit NACE sector and year distribution are excluded as outliers in the analyses. Standard errors clustered at the industry level are in parentheses. ***, **, and * indicate significance at 1 percent, 5 percent, and 10 percent. The reference categories for age and size groups are Start-ups (0-2) and Small (10-49), respectively.<sup>**†**</sup> indicates values are for the state ownership model using 10-100% stake. All models include a constant term.

Table 6: Early Effect of COVID-19 Pandemic on Growth of Employment, Operating Revenue, and Average Wages of SOEs Relative to POEs in Romania by Sector, 2016-2020

||**Empl**|**(1)**<br>**oyment growth **||**Operat**|**(2)**<br>**ing revenue gr**|**owth **|**Ave**|**(3)**<br>**rage wage gro**|**wth **|
|---|---|---|---|---|---|---|---|---|---|
||_Competitive_|_Partially_<br>_Contestable_|_Natural_<br>_Monopoly_|_Competitive_|_Partially_<br>_Contestable_|_Natural_<br>_Monopoly_|_Competitive_|_Partially_<br>_Contestable_|_Natural_<br>_Monopoly_|
|_Panel A:_||||||||||
|**Interaction effect**||||||||||
|_10-100% x 2020_|0.042<sup>***</sup>|-0.016|-0.027|0.092<sup>***</sup>|-0.068|-0.022|0.047<sup>***</sup>|0.038<sup>*</sup>|-0.010|
||(0.016)|(0.023)|(0.022)|(0.032)|(0.060)|(0.028)|(0.017)|(0.019)|(0.012)|

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