Ms. Era Dabla-Norris, Florian Misch, Mr. Duncan Cleary, and Munawer Khwaja
small firms, we consider both small and medium enterprises. In particular, we interact the index of tax administration quality with a dummy indicating whether or not the firm is a small or medium firm (SME) in Column (4). Our original results remain robust in both specifications.
Finally, in Column (5), we also include a dummy for large firms (defined as firms with at least 100 employees) and an interaction term of the large dummy with the TAQI implying that the omittedfirmcategory are medium-sized firms. The results suggest that small firms are less productive