# **3. Data**

Data on publicly listed firms are obtained from the Financial Statements Analysis of Companies (Non-Financial) Listed at Pakistan Stock Exchange. The data set contains balance sheet, income statement, and export flow data for 410 publicly listed firms in Pakistan over the period 2012-2017.<sup>7</sup> We exclude from the analysis firms that are either in the coke and petroleum sector or are state-owned companies. Of the remaining 322 companies, 262 companies are observed throughout the period, while 46 companies exited at various points during the period and only 14 entered the sample after 2012. Firm-level data are matched to the Orbis data set from Bureau van Dijk (BvD) to obtain information on foreign ownership for most firms (98 percent), and data on the number of employees for about 68 percent of firms. All nominal variables are deflated using sectoral deflators provided by the Pakistan Bureau of Statistics. We define foreign ownership by the presence of at least one direct foreign shareholder as reported by BvD.<sup>8</sup> We construct a measure of innovation by considering the presence of intangible assets, which include patents, copyrights, trademarks, exploration accounts, and knowledge accounts. The innovation ratio is defined as the ratio of intangible assets over total assets. Tariffs are obtained from the UN TRAINS database, while FDI inflows are obtained from the State Bank of Pakistan.

Table 2 – Descriptive statistics

|Sector|Average<br>sales|Average<br>wages|Employees|Share of<br>exporters|Share of<br>foreign<br>owned|Share of<br>innovators|Obs|Firms|
|---|---|---|---|---|---|---|---|---|
|Beverages and tobacco|13.87|8.86|215.30|0.20|0.25|0.40|20|4|
|Chemicals|11.98|5.93|270.19|0.44|0.31|0.61|228|50|
|Food|16.53|6.18|307.97|0.47|0.41|0.54|70|15|
|Machinery|5.84|3.43|368.39|0.47|0.42|0.65|43|9|
|Metals|12.39|3.62|465.29|0.71|0.00|0.68|34|7|
|Motor|19.78|4.50|452.22|0.41|0.17|0.71|90|20|
|Non-metallic minerals|11.16|4.47|475.63|0.76|0.37|0.39|135|29|
|Paper|9.45|4.73|198.52|0.55|0.38|0.88|40|8|
|Power|38.66|4.85|165.44|0.00|0.35|0.53|79|17|
|Sugar|5.62|1.45|453.49|0.69|0.59|0.21|147|31|
|Textiles|5.62|2.65|425.62|0.70|0.73|0.20|591|132|
|Total|10.63|3.78|376.43|0.58|0.51|0.39|1477|322|

Note: authors’ calculations based on Financial Statements Analysis of Companies (Non-Banking) public at Pakistan Stock Exchange and data on foreign ownership from Bureau van Dijk. Sales are in billion PKR while wages are in million PKR.

Publicly listed firms are among the largest in the economy, accounting for 13 percent of Pakistan’s GDP in 2017. Firms in our sample employ on average 380 employees and are spread across 11 sectors, with a larger presence in the textiles sector. In terms of sales, the median publicly listed firm is more than six times larger than a relatively large medium-sized firm in Pakistan, yet about 16 percent of firms in our sample would classify as medium-sized firms.<sup>9</sup>

> 7 A similar data set is available for 168 listed companies in the financial sector, which are not considered in this analysis. 8 BvD collects ownership data from official registers, stock exchanges, annual reports, company websites, and news outlets.

> 9 Using 2017 data, the median publicly listed firm has annual sales of about 4 billion PKR compared to the upper threshold for a medium firm, as indicated by the State Bank of Pakistan, update to 2017 is 600 million PKR.

8