**Table 4: Innovation, Firm Size, Competition, and Firm Characteristics**

Marginal Effects from Probit Estimation

||(1)|(2)|(3)|(4)|(5)|(6)|(7)|(8)|(9)|(10)|
|---|---|---|---|---|---|---|---|---|---|---|
||Any<br>Innovation|Product<br> Innovation|Process<br> Innovation|Marketing <br> Innovation|Organization<br>Innovation|Any<br>Innovation|Product<br>Innovation|Process<br>Innovation|Marketing<br>Innovation|Organization<br>Innovation|
|Firm Size 1 to 4 workers|0.123***|0.0595***|0.0497***|0.0987***|0.0741***|0.122***|0.0580***|0.0459***|0.0940***|0.0735***|
||(0.0217)|(0.0179)|(0.0124)|(0.0205)|(0.0157)|(0.0226)|(0.0185)|(0.0126)|(0.0212)|(0.0161)|
|Firm Size 5 to 9 workers|0.202***|0.0769***|0.0844***|0.181***|0.205***|0.177***|0.0556*|0.0801***|0.154***|0.196***|
||(0.0308)|(0.0275)|(0.0230)|(0.0308)|(0.0300)|(0.0354)|(0.0299)|(0.0262)|(0.0347)|(0.0352)|
|Firm Size 10 to 24 workers|0.253***|0.172***|0.153***|0.165***|0.264***|0.213***|0.118***|0.138***|0.127***|0.251***|
||(0.0402)|(0.0405)|(0.0379)|(0.0417)|(0.0426)|(0.0452)|(0.0424)|(0.0415)|(0.0448)|(0.0477)|
|Firm Size 25+ workers|0.350***|0.247***|0.235***|0.346***|0.430***|0.265***|0.146***|0.186***|0.285***|0.380***|
||(0.0407)|(0.0452)|(0.0463)|(0.0435)|(0.0475)|(0.0480)|(0.0461)|(0.0472)|(0.0491)|(0.0536)|
|Manufacturing|0.0785***|0.0586***|0.0311***|0.0672***|0.00724|0.0508**|0.0345*|0.0216*|0.0494**|-0.00317|
||(0.0236)|(0.0191)|(0.0117)|(0.0221)|(0.0136)|(0.0244)|(0.0192)|(0.0113)|(0.0226)|(0.0133)|
|Retail|0.00500|-0.0267|-0.00575|0.0267|0.000943|-0.0208|-0.0420**|-0.00953|0.00352|-0.00394|
||(0.0227)|(0.0176)|(0.0102)|(0.0212)|(0.0128)|(0.0236)|(0.0180)|(0.0102)|(0.0217)|(0.0127)|
|Colombo District|0.00118|0.00920|-0.0222***|-0.0289*|-0.00651|0.0188|0.0221|-0.0207**|-0.0143|-0.00545|
||(0.0193)|(0.0153)|(0.00802)|(0.0175)|(0.0109)|(0.0201)|(0.0159)|(0.00810)|(0.0182)|(0.0111)|
|No Competitors|0.0408|0.0267|0.0234|0.0187|0.0447|0.0392|0.0314|0.0321|0.00685|0.0306|
||(0.0471)|(0.0383)|(0.0231)|(0.0421)|(0.0305)|(0.0485)|(0.0390)|(0.0246)|(0.0425)|(0.0287)|
|1 to 6 Competitors|-0.00109|0.0146|-0.000287|-0.00108|-0.000557|0.00506|0.0195|0.000210|0.00299|-0.00127|
||(0.0255)|(0.0207)|(0.0107)|(0.0230)|(0.0139)|(0.0261)|(0.0211)|(0.0107)|(0.0234)|(0.0137)|
|More than 20 Competitors|-0.0731**|-0.0506**|-0.0400***|-0.0697***|-0.0391***|-0.0924***|-0.0588***|-0.0392***|-0.0834***|-0.0441***|
||(0.0288)|(0.0218)|(0.00884)|(0.0253)|(0.0134)|(0.0288)|(0.0217)|(0.00885)|(0.0249)|(0.0127)|
|Number of Competitors Unknown|-0.0904***|-0.00754|-0.0200**|-0.0974***|-0.0314**|-0.0769***|0.00637|-0.0173*|-0.0893***|-0.0326***|
||(0.0241)|(0.0197)|(0.00975)|(0.0213)|(0.0127)|(0.0249)|(0.0204)|(0.00996)|(0.0217)|(0.0125)|
|Customers would take a day or less|-0.0377**|-0.0181|-0.0125|-0.0282|-0.0413***|-0.0295|-0.0167|-0.0116|-0.0251|-0.0351***|
|<br>to replace the firm if they closed|(0.0188)|(0.0147)|(0.00850)|(0.0172)|(0.0112)|(0.0196)|(0.0152)|(0.00862)|(0.0178)|(0.0114)|
|Firm is less than 5 years old||||||-0.000451|-0.0178|-0.00148|0.0131|0.00426|
|||||||(0.0202)|(0.0156)|(0.00902)|(0.0186)|(0.0117)|
|Firm exports||||||0.212***|0.175**|0.00900|0.0835|0.0823*|
|||||||(0.0772)|(0.0716)|(0.0275)|(0.0698)|(0.0500)|
|Firm is legally registered||||||0.0210|-0.00475|-0.00485|0.0291|0.00381|
|||||||(0.0222)|(0.0176)|(0.00974)|(0.0203)|(0.0124)|
|Firm has received a bank loan||||||0.100***|0.0710***|0.0297***|0.0689***|0.0138|
|||||||(0.0200)|(0.0161)|(0.00949)|(0.0183)|(0.0111)|
|Diversification (proportion of revenues|coming fro|m other than|main prod|uct)||0.0935***|0.109***|0.00757|0.0691**|0.00863|
|||||||(0.0331)|(0.0251)|(0.0136)|(0.0300)|(0.0183)|
|Proportion of Goods Custommade||||||0.192***|0.111***|0.0408***|0.122***|0.0623***|
|||||||(0.0345)|(0.0250)|(0.0128)|(0.0305)|(0.0169)|
|Observations|2865|2865|2865|2865|2865|2745|2745|2745|2745|2745|
|Robust standard errors in parenthese|s, *** p<0.01|, ** p<0.05,|* p<0.1||||||||

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