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



Table B: Production Function Estimation - Specification Testing

Sector 15

βki = 0

ωt = 0

μ = 0

γ = 0

LL Restricted

-12,277

-12,191

-12,191

-12,986

LL unrestricted

-12,191

-12,170

-12,170

-12,170

Test Statistic

172.99

41.60

42.94

1,633.25

Result

Reject null (1%)

Reject null (1%)

Reject null (1%)

Reject null (1%)

Sector 17

βki = 0

ω = о

μ = 0

γ = 0

LL Restricted

-2,172

-2,166

-2,147

-2,264

LL unrestricted

-2,166

-2,147

-2,147

-2,147

Test Statistic

13.28

37.64

1.18

233.72

Result___________

Reject null (1%)

Reject null (1%)

Do not reject

Reject null (1%)

Sector 18

βki = 0

ω = о

μ = 0

γ = 0

LL Restricted

-3,831

-3,824

-3,816

-3,978

LL unrestricted

-3,824

-3,807

-3,807

-3,807

Test Statistic

13.22

33.72

17.20

341.48

Result

Reject null (1%)

Reject null (1%)

Reject null (1%)

Reject null (1%)

Sector 19

βki = 0

ω = о

μ = 0

γ = 0

LL Restricted

-1,223

-1,212

-1,211

-1,297

LL unrestricted

-1,212

-1,206

-1,206

-1,206

Test Statistic

21.07

13.28

11.22

183.35

Result___________

Reject null (1%)

Reject null (1%)

Reject null (1%)

Reject null (1%)

Sector 20

βki = 0

ω = о

μ = 0

γ = 0

LL Restricted

-3,524

-3,511

-3,510

-3,700

LL unrestricted

-3,511

-3,507

-3,507

-3,507

Test Statistic

25.74

7.28

6.41

386.47

Result

Reject null (1%)

Reject null (10%)

Reject null (5%)

Reject null (1%)

Sector 21

βki = 0

ω = о

μ = 0

γ = 0

LL Restricted

-2,087

-2,073

-2,069

-2,284

LL unrestricted

-2,073

-2,065

-2,065

-2,065

Test Statistic

28.26

15.01

7.89

436.62

Result___________

Reject null (1%)

Reject null (1%)

Reject null (1%)

Reject null (1%)

Sector 22

βki = 0

ω = о

μ = 0

γ = 0

LL Restricted

-2,013

-2,004

-2,001

-2,187

LL unrestricted

-2,004

-1,993

-1,993

-1,993

Test Statistic

18.20

23.29

17.13

389.03

Result

Reject null (1%)

Reject null (1%)

Reject null (1%)

Reject null (1%)

Sector 24

βki = 0

ω = о

μ = 0

γ = 0

LL Restricted

-2,288

-2,282

-2,280

-2,471

LL unrestricted

-2,282

-2,277

-2,277

-2,277

Test Statistic

12.26

10.59

5.89

388.97

Result___________

Reject null (1%)

Reject null (5%)

Reject null (5%)

Reject null (1%)

Sector 25

βki = 0

ω = о

μ = 0

γ = 0

LL Restricted

-3,085

-3,061

-3,064

-3,302

LL unrestricted

-3,061

-3,061

-3,061

-3,061

Test Statistic

46.72

1.67

6.16

481.23

Result

Reject null (1%)

Do not reject

Reject null (5%)

Reject null (1%)

Sector 26

βki = 0

ω = о

μ = 0

γ = 0

LL Restricted

-4,237

-4,216

4,169

-4,578

LL unrestricted

-4,216

-4,168

-4,168

-4,169

Test Statistic

41.47

95.64

1.15

871.45

Result___________

Reject null (1%)

Reject null (1%)

Do not reject

Reject null (1%)

43



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