Benchmark estimation and robustness checks (placebo test and system GMM)
| Variable | Fixed effect | Placebo test | System GMM |
|---|---|---|---|
| I | II | III | |
| GD | 0.023*** (2.83) | −0.001 (−0.10) | 0.014** (2.07) |
| GDP | −0.940*** (−6.52) | −0.936*** (−6.47) | −0.811*** (−3.04) |
| GDP_squared | 0.021*** (7.31) | 0.021*** (7.23) | 0.017*** (4.09) |
| TP | 0.137*** (7.45) | 0.135*** (7.34) | 0.011*** (3.22) |
| UR | −0.119* (−1.76) | −0.148** (−2.24) | 0.013 (0.05) |
| SI | −0.152** (−2.50) | −0.158*** (−2.60) | −0.069* (−1.73) |
| FDI | 0.137* (1.84) | 0.138* (1.86) | 0.010 (0.12) |
| FFEC | 0.447*** (12.60) | 0.453*** (12.80) | −0.146 (−0.96) |
| Constant | 13.335*** (7.54) | 13.394*** (7.56) | 10.149*** (3.34) |
| Lagged dep. var | 0.946*** (13.73) | ||
| R-squared | 0.407 | 0.332 | |
| Observations | 1,256 | 1,256 | 810 |
| Country FE | YES | YES | |
| Year FE | YES | YES | |
| Sargan test | 0.402 | ||
| AR(1) | 0.000 | ||
| AR(2) | 0.397 |
| Variable | Fixed effect | Placebo test | System |
|---|---|---|---|
| I | |||
| 0.023 | −0.001 (−0.10) | 0.014 | |
| −0.940 | −0.936 | −0.811 | |
| GDP_squared | 0.021 | 0.021 | 0.017 |
| 0.137 | 0.135 | 0.011 | |
| −0.119 | −0.148 | 0.013 (0.05) | |
| −0.152 | −0.158 | −0.069 | |
| 0.137 | 0.138 | 0.010 (0.12) | |
| 0.447 | 0.453 | −0.146 (−0.96) | |
| Constant | 13.335 | 13.394 | 10.149 |
| Lagged dep. var | 0.946 | ||
| 0.407 | 0.332 | ||
| Observations | 1,256 | 1,256 | 810 |
| Country | |||
| Year | |||
| Sargan test | 0.402 | ||
| AR(1) | 0.000 | ||
| AR(2) | 0.397 |
t-Statistics are in parenthesis; ***, ** and * denote statistical significance at the 1, 5 and 10% levels, respectively