Online Appendix for Predation, Protection and Productivity: A Firm-Level Perspective by

ENTERPRISE SURVEY DATA. — We use data base on Enterprise Survey of the World Bank Group for the period 2002-2016 . Details on the methodology and data collection are available at http://www.enterprisesurveys.org/methodology. The data are collected on behalf of the World Bank by private contractors since they asked a range of sensitive questions and respondents are assured of confidentiality. The survey is answered by business owners and top managers with 1200-1800 interviewed in larger economies, 360 interviews are conducted in medium-sized economies, and for smaller economies, 150 interviews take place. The aim is to cover both the manufacturing and services sectors. Formal (registered) companies with 5 or more employees are targeted for interview. Services firms include construction, retail, wholesale, hotels, restaurants, transport, storage, communications, and IT. Firms with 100% government/state ownership are excluded. Most of the coverage is in the cities/regions of major economic activity. There are two main instruments: one for manufacturing and one for services. The standard survey includes firm characteristics, gender participation, access to finance, annual sales, costs of inputs/labor, workforce composition, bribery, licensing, infrastructure, trade, crime, competition, capacity utilization, land and permits, taxation, informality, business-government relations, innovation and technology, and performance measures. The data are collected in face-to-face interviews. We merge two standardize data sets, the Standardized data for 2002-2005 and the Standardized data 2006-2016. We describe the construction of the variables for each of the two periods. For the 2002-2005 period, Security Costs as percentage of sales (SCAS) is computed as the sum of two variables, namely, Cost of providing security as percentage of sales and Cost of providing protection payments as percentage of sales. Loss due to theft, robbery, vandalism or arson as a percentage of sales (LDTV) is directly reported in the data set. For the 2005-2016 period, respondents indicate either the absolute amount, which one can use to compute as percentage of total sales, or directly the amount as percentage of total annual sales. SCAS and LDTV are the two type of answers combined. We disregard observed loss shares or security costs above 100% of total sales. By doing it, we lose 46 observations for LDTV and 104 observations for SCAS. The number of employees is constructed as the sum of permanent employees and temporary employees adjusted by the average length of employment of temporary workers. We dropped 4 outliers from Malaysia which reported employment of between 100,000 and 2,000,000 workers. The largest firm after this is in China and reported about 66,000 employees. Finally, capital is computed as the sum of the net book value of machinery and equipment and the net book value of land and buildings. In most of our analysis