Table 7 Variables and measurement

Dependent variable

 Employment growth

Continuous

Is measured as the difference between permanent employees in the last fiscal year and 3 years before the survey divided by the firm’s average permanent employees during the same period

\(EG_{ijc} = {{\left( {EG_{ijct} - EG_{ijc(t - 3)} } \right)} \mathord{\left/ {\vphantom {{\left( {EG_{ijct} - EG_{ijc(t - 3)} } \right)} {\left( {{{EG_{ijc(t - 3)} } \mathord{\left/ {\vphantom {{EG_{ijc(t - 3)} } 2}} \right. \kern-0pt} 2}} \right)}}} \right. \kern-0pt} {\left( {{{EG_{ijc(t - 3)} } \mathord{\left/ {\vphantom {{EG_{ijc(t - 3)} } 2}} \right. \kern-0pt} 2}} \right)}}\)

Where \(t\) and \(t - 3\) represent last fiscal year and 3 years before the survey, respectively

Independent variables

Firm specific characteristics

 Age

Continuous

This calculated as the difference between the year the survey was taken in each country and the year when the firm began its operations

 Size

Category

This is generated from the number of full time permanent employees and is categorized into small (20 and below employees), medium (20–100 employees) and large (more than 100 employees)

 Research and development

Dummy

Defined as to whether the firm spent on R&D in the previous fiscal year taking on the value of ‘1’ if the firm spent on R&D and ‘0’ if the firm did not spend on R&D

 Ownership

Dummy

Measured as to whether the firm is owned by private foreign individual taking on a value of ‘2’ or domestically owned with a value of ‘1’

 Innovation

Dummy

Refers to whether a firm introduced both a new product and process in the last fiscal year; taking on a value of ‘1’ if the firm introduced both a new product and process

 Website use

Dummy

Takes on the value of ‘1’ if the firm has its own website or zero otherwise

Entrepreneur characteristics

 Managers experience

Continuous

Defined as the number of years of experience of the firm’s top manager

 Gender of top management

Dummy

Takes on the value of ‘1’if the top manager was female and ‘0’ otherwise

 Formal training

Dummy

Takes on the value of ‘1’ if the firm had formal training programs for its full time employees in the last fiscal years and ‘0’ otherwise

Business environment

 Electricity

Dummy

Measures whether firms experienced any power outage in the last fiscal year prior to the survey, taking on the value of ‘1’ is a firm experienced any obstacles and zero otherwise

 Access to finance

Dummy

Defined in the dataset as to whether a firm found an obstacle in accessing finance taking on a value of ‘1’ if the firm found any obstacles and ‘2’ otherwise

 Informal payments

Continuous

Defined as the percentage of total annual sales paid in informal payments to public official in the dataset

 Competition

Dummy

Takes on two measure in the dataset; the first asking firms whether they face more than 5 competitors and the second asking firms whether they face any competition from informal or unregistered firms. In the study, competition takes on a value of ‘1’ if the firm faced competition and ‘0’ otherwise

 Business licensing

This relates to how much business licensing is an obstacle to firms and takes on the value of ‘0’ for those without any obstacles and ‘1’ for those firms that found any obstacles

 Court system

Defined in the dataset as to whether a firm found an obstacle in accessing courts of law taking on a value of ‘1’ if the firm found any obstacles and ‘0’ otherwise

Control variables

 Country

Dummy

Defined as the country dummy with Uganda taking on a value of ‘0’ while Burundi, Kenya, Rwanda and Tanzania are taking on a value of ‘1’ ‘2’ ‘3’ and ‘4’respectively

 Sector

Dummy

Two sectors are considered in the study. That is; the manufacturing sector taking on the value of ‘1’ and service sector which takes on the value of ‘0’