of such a proxy, we use the legal status of firms and the gender of the top manager. These two variables are certainly not proxies for the quality and the system of management, but they can impact them. The legal status is captured by an ordinal qualitative variable (Sole proprietorship=1; Limited partnership=2; Partnership=3; Shareholding company with nontraded shares or shares traded privately=4; Shareholding company with shares trade in the stock market=5). The gender variable is a dummy that takes 1 if the top manager is a woman and 0 otherwise.

- _Transport:_ This variable controls for the effects of constraints related to access to transport infrastructure. This constraint is measured by the subjective response given by a firm to the following question: to what extent is transport an obstacle to this establishment's activity? The response is: 0 for no barrier, 1 for minor barrier, 2 for moderate barrier, 3 for major barrier, and 4 for very major barrier.

- _Backward-looking variables:_ They represent total sales and total employment over the three years prior to the survey. As in growth models, the use of these variables makes it possible to control for initial performance and catch-up effects.

# **4.** **<u>Country-level control variables</u>**

- _Trade openness(t-1):_ This variable considers the degree to which countries are oriented towards foreign trade. We consider the KOF trade globalization index. It is the weighted average of the de facto and de jure indices. The relevance of this measure lies in the fact that we have both trade volume and trade policy dimensions.

- _Real exchange rate growth(t-1):_ This variable tracks the effect of non-price determinants of competitivity. A body of research shows that depreciating or undervaluing the real exchange rate is an effective way of promoting manufacturing exports (Rodrik, 2018; Freund and Pierola, 2012; Bernard and Jensen, 2004). According to the authors, exchange rate depreciation is an indirect subsidy. Reducing distortions faced by manufacturing firms, the depreciation gives manufacturing firms a competitive advantage. However, it is not clear if this competitive advantage increases exports more than domestic sales. The real exchange rate is from Penn World Table 10.1.

# **5.** **<u>Firm-level covariates</u>**

Covariates are variables used in both the first and second stages of entropy balancing. They are the determinants of the treatment’s occurrence (access to electricity). Company-level covariates are therefore company's characteristics that can explain a specific company's access to electricity.

- _Firms’ size:_ It is reasonable to say that the ability of firms to respond to challenges in access to electricity is strongly correlated with their size. Thus, the difference in terms of size can explain the fact that some companies have access to electricity whereas others may not. Since firms' size can explain the occurrence of electricity access, it is among the covariates in the first stage of entropy balancing, and a control variable in the second stage. It is important to note that the size in covariate and control variable only in the overall sample. In the WBES, small-sized companies are those employing no more than 19 people, medium-sized companies are defined as those employing between 20 and 99 people, while large-sized companies are classified as having more than 100 employees.

7