Two-step GMM estimates of a five-year, moving-average specification for China and India, 1985 to 2005
| Variables | China (1985–2005) | India (1985–2005) | ||
|---|---|---|---|---|
| Growth equation | Equalization equation | Growth equation | Equalization equation | |
| Growth rate in real GRP per capita | – | 0.01*** (0.002) | – | 0.01*** (0.002) |
| Index of fiscal equalization | 1.08 (0.88) | – | 12.00*** (4.24) | – |
| Index of fiscal decentralization | −1.21*** (0.39) | 0.13*** (0.02) | −4.31 (3.14) | −0.15*** (0.05) |
| Index of fiscal decentralization-squared | 0.08*** (0.02) | −0.01*** (0.001) | 0.78*** (0.25) | −0.02*** (0.005) |
| Growth rate of fixed asset investment | 0.17*** (0.01) | – | 2.29** (1.03) | – |
| Growth rate of employment | −9.53*** (3.46) | – | 34.70*** (5.63) | – |
| Government size | 0.09** (0.04) | −0.01*** (0.002) | −0.26*** (0.07) | 0.005*** (0.002) |
| Central government development spending | 0.02 (0.04) | −0.001 (0.002) | 0.81*** (0.22) | 0.0004 (0.003) |
| Share of missing women in population | – | −0.01 (0.02) | – | −0.04*** (0.01) |
| Rate of fiscal self-reliance | – | −0.001 (0.001) | – | −0.002 (0.002) |
| Fiscal regime (=1 if year ≥ 1994; else 0) | 5.22*** (0.96) | −0.08 (0.06) | – | – |
| Fiscal regime (=1 if year ≥ 1991; else 0) | – | – | −9.35*** (2.66) | 0.33*** (0.05) |
| Number of observations | 415 | 446 | 238 | 238 |
| Sargan statistic | 4.25 p-value = 0.24 | 3.20 p-value = 0.20 | 3.24 p-value = 0.20 | 4.07 p-value = 0.13 |
| Variables | China (1985–2005) | India (1985–2005) | ||
|---|---|---|---|---|
| Growth equation | Equalization equation | Growth equation | Equalization equation | |
| Growth rate in real GRP per capita | – | 0.01 | – | 0.01 |
| Index of fiscal equalization | 1.08 (0.88) | – | 12.00 | – |
| Index of fiscal decentralization | −1.21 | 0.13 | −4.31 (3.14) | −0.15 |
| Index of fiscal decentralization-squared | 0.08 | −0.01 | 0.78 | −0.02 |
| Growth rate of fixed asset investment | 0.17 | – | 2.29 | – |
| Growth rate of employment | −9.53 | – | 34.70 | – |
| Government size | 0.09 | −0.01 | −0.26 | 0.005 |
| Central government development spending | 0.02 (0.04) | −0.001 (0.002) | 0.81 | 0.0004 (0.003) |
| Share of missing women in population | – | −0.01 (0.02) | – | −0.04 |
| Rate of fiscal self-reliance | – | −0.001 (0.001) | – | −0.002 (0.002) |
| Fiscal regime (=1 if year | 5.22 | −0.08 (0.06) | – | – |
| Fiscal regime (=1 if year | – | – | −9.35 | 0.33 |
| Number of observations | 415 | 446 | 238 | 238 |
| Sargan statistic | 4.25 | 3.20 | 3.24 | 4.07 |
Note(s): Robust standard errors are provided in parentheses
*** Statistically significant at the 1% level; ** at the 5% level; and * at the 10% level
aThe estimated coefficients of the catastrophe dummy variables are not reported but are available from the authors upon request
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