Potential Selectivity Bias in Data

A number of recent firm-level studies on Indian industry have used data available from Prowess, a database of Indian firms compiled by the Centre for Monitoring Indian Economy. This paper attempts to identify the extent and nature of potential selectivity biases in samples drawn from Prowess. The paper shows that the distributional properties of samples drawn from Prowess are not consistent over the years. Also, the distributional properties of a balanced panel extracted from the database are not consistent with those of the full sample in different years.