Sector Switching: An Unexplored Dimension of Firm Dynamics in Developing Countries



Table 9: SECTOR SWITCHING AND EXIT DETERMINANTS - FIRM SPECIFIC EXPLANATIONS

Sector Switching (SW2)

_________Firm Exit (EXIT)_________

(1)

(2)

(3)

(4)

(5)

(6)

Firm specific variables

Relative efficiency (weighted)

-43.7414***

-15.1230**

-9.7153

-45.7931***

-22.2958***

-17.5795***

(6.22)

(2.34)

(1.55)

(6.08)

(3.11)

(2.55)

Firm size (log)

-0.1257***

-0.0843***

-0.1592***

-0.1869***

(7.05)

(4.46)

(7.16)

(7.91)

Firm age (log)

-0.1782***

-0.1182***

0.1367***

0.0218

(4.71)

(2.98)

(3.54)

(0.61)

State owned enterprise (SOE)

-0.5335***

0.5090***

(5.42)

(6.62)

Foreign owned firm (Multinational)

-0.2285***

-0.4127***

(2.99)

(4.70)

Provincial dummies

Yes

Yes

Yes

Yes

Yes

Yes

Sector dummies_________________

Yes

Yes

Yes

Yes

Yes

Yes

Observations

24,363

24,363

24,363

24,363

24,363

24,363

Groups

10,570

10,570

10,570

10,570

10,570

10,570

Log Likelihood

-3872.61

-3827.66

-3809.49

-6572.56

-6519.94

-6464.44

Wald (chi-sq)

683.53

743.80

757.50

161.81

173.56

202.38

Likelihood ratio test (p-value)______

0.00

0.00

0.00

0.01

0.00

0.00

Note: Dependent variable: Sector switching (SW2) and exit (EXIT). Random effects probit estimation. All estimations included a constant
term and time dummies. t-values reported in parenthesis. *, **, *** indicate significance at a 10%, 5% and 1% level, respectively. Base: Food
processing and HCMC. The total number of sector switchers and exits are 1,076 and 1,937 in the unbalanced panel, respectively.

39



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