APPENDIX A
39 Third-digit Sectors in Manufacturing Industry According to Code of Chinese National Economic Classification (GB/T 4754-2002)
Coal Mining and Processing, Petroleum and Natural Gas Extraction, Ferrous Metals Mining and Processing, Nonferrous Metals Mining and Processing, Nonmetal Minerals Mining and Processing, Other Minerals Mining and Processing, Logging and Transport of Timber and Bamboo, Food Processing, Food Manufacturing, Beverage Manufacturing, Tobacco Processing, Textile Industry, Garments and Other Fiber Products, Leather, Furs, Down and Related Products, Timber Processing, Bamboo, Cane, Palm Fiber and Straw Products, Furniture Manufacturing, Papermaking and Paper Products, Printing and Record Pressing, Stationery, Educational and Sports Goods, Petroleum Processing and Coking Products, Raw Chemical Materials and Chemical Products, Medical and Pharmaceutical Products, Chemical Fibers, Rubber Products, Plastic Products, Nonmetal Mineral Products, Smelting and Pressing of Ferrous Metals, Smelting and Pressing of Nonferrous Metals, Metal Products, Ordinary Machinery Manufacturing, Special Purpose Equipment Manufacturing, Transportation Equipment Manufacturing, Electric Equipment and Machinery, Electronic and Telecommunications, Instruments, Meters, Cultural and Official Machinery, Other Manufacturing, Electric Power, Steam and Hot Water Production and Supply, Gas Production and Supply and Tap Water Production and Supply.
Four Abandoned Sectors in Sample
Petroleum and Natural Gas Extraction, Other Minerals Mining and Processing, Logging and Transport of Timber and Bamboo, and Other Manufacturing.
APPENDIX B
The likelihood ratio (LR) tests for the pooled regression model against the FE model. The test statistic, under the null hypothesis u1=u2 …=un =u, is
where RSS and RSS represent the residual sums of squares in the restricted and unrestricted models respectively. In this case, the restricted model is the pooled regression model and the unrestricted model is the FE model. Rejection of null hypothesis favours use of FE model.
The Hausman specification (HS) test for the RE model against the FE model. The test statistic, under the null hypothesis that RE model is the correct specification, is
(9) ) ( ~ ) ( ) ( )' (b b Var b b 1 b b 2 k HS = fe− re fe− re − fe− re χ
