Structural Reforms and FDI Flows: Do They Work and Under ... · of the capital account...

Structural Reforms and FDI Flows: Do They Work

and Under What Conditions?∗

Preliminary and Incomplete

Paper 320

Panagiotis Th. Konstantinou

Abstract

Do structural reforms work in attracting more FDI? What determines the effective-

ness of reforms in doing so? What is the role of the institutional environment in the

reforming country? This paper takes a fresh look at these questions, employing a com-

prehensive dataset of structural reforms (e.g. trade, product markets, labor markets,

domestic finance, banking) for an extensive list of developed and developing countries.

A first set of evidence indicates that few reforms are, on average, positively associated

with higher FDI inflows. In addition, this effect is found to be heterogeneous across

countries, and depends on the institutional quality of the reforming countries.

Keywords: Structural Reforms, FDI Flows.

Current Version: July 29, 2016.

∗Paper prepared for the European Trade Study Group (ETSG) Conference, 8-8 September 2016, Helsinki.

0

1 Introduction

Foreign direct investment (FDI) is a key ingredient of economic and financial globalization.

Although the exact benefits of globalization are still debatable, FDI is thought to be an impor-

tant channels via which such benefits might be delivered (Prasad et al, 2003). On the other

hand FDI is also considered to be the least volatile form of capital flows making countries

less vulnerable to sudden stops (Kose et al. 2010).1 An important policy question that arises

in this context is what are the key drivers FDI to particular destinations. And in particular,

what are the effects of structural reforms on FDI flows

In this paper I revisit the question on the determinants of FDI inflows, focusing mainly

on the role of structural reforms. I make use of a novel dataset put together by the IMF

research department that covers a long time-span (from 1973 to 2006) and covering a large

cross-section of countries (about 145). So unlike the work of Campos and Kinochita (2010)

I am able to focus on a larger group of countries, and obtain results for a large time period.

The main finding of this paper is that does not seem to be a strong relationship between

structural reforms to FDI, or, to put it differently, only for some types of reforms the effects

are significant. Among the structural reforms considered in the study, I find the more ro-

bust, stronger effect on FDI from financial sector reforms, namely from lessening the capital

account transaction restrictions imposed on the residents of the host country. One possible

interpretation of this finding is that foreign investors do value an efficient financial system,

but they tend to rely on locals to complete their transactions once the funds have been already

invested in a country.

The results presented here have important policy implications as they stress that struc-

tural reforms alone, cannot act as a panacea in order to attract capital to a country. While

conventional wisdom has it that reforms are growth enhancing (see e.g. Pratti (2013)), it

turns out that these improved economic outcomes to do not come about simply by attracting

capital from abroad.

The rest of the paper is organized as follows. The following section briefly reviews

1See also Milesi-Ferretti and Tille (2011) for evidence on the relative stability of FDI flows during the recent

financial crisis.

1

the literature and section 3 gives an overview of the data and empirical models. Section 4

presents the findings of this paper and the last section concludes.

2 Analytical Framework

While there are some theoretical predictions about the relationships between attracting cap-

ital flows in the form of FDI and economic reforms, empirical evidence on the subject is

limited to reforms in specific sectors, in particular, international trade and finance, or spe-

cific countries (e.g. Latin American or OECD countries) over a short period of time. This

study is among the few to combine a comprehensive coverage of reforms in different sectors,

a large cross-section of countries, and a long time period. In particular, the dataset used in

this paper spans six sectors, and a set of both developing and developed countries from 1973

up until 2006.

The existing literature indicates that the most important locational determinants are the

usual sources of comparative advantages of the host country. Firms choose the investment

site that minimizes the cost of production. In particular, host country’s market size and

relative factor prices (that is, natural resources, labor cost, and human

capital) all affect the expected profitability of foreign investment. Wheeler and Mody

(1992) find that infrastructure availability is an important attribute for foreign investors in

the United States. On the other hand, the riskiness of investment in terms of economic and

political environment also affects the expected returns to the investment. Hence, greater

macroeconomic and political stability of the host country could attract more FDI. Moreover,

It is often argued that FDI and trade openness can be positively related as FDI flows can be

considered complementary to trade flows (Caves, 1996).

3 Data and Empirical Methodology

In this section, we proceed by first giving a brief overview of the data and then by discussing

our econometric methodology.

2

3.1 Data

The results presented here are based on a new and extensive dataset, compiled by the Re-

search Department of the IMF, describing the degree of regulation for a sample of roughly

150 industrial and developing countries. This dataset has great advantages over other data

sources (for instance OECD), which cover a limited number of sectors and countries. Reg-

ulation indices cover six sectors, including both financial and real sectors. Financial sector

regulation indices cover the domestic financial market (banks and securities markets) and

the international transactions (the capital account), while real sector indicators include mea-

sures of regulation for product and agriculture markets, trade, and the current account. Each

indicator is normalized between zero and one, with higher being associated with lower reg-

ulation. Ostry, Prati, and Spilimbergo (2009) give an overview if all data sources and details

of the construction of the indicators.2

Regarding Capital Account regulation, I employ four indices below which include in-

formation a broad set of restrictions, such as, for example, controls on external borrowing

between residents and nonresidents, as well as approval requirements for foreign direct in-

vestment (FDI). In particular, I employ three measures derived by Quinn (1997) and Quinn

and Toyoda (2007, 2008): one for the overall degree of regulation, one referring to residents

only and one to nonresidents. I also employ a measure that has been put together by Abiad

et al. (2008) following the methodology of Abiad and Mody (2005).

Other data employed include:

• The data on FDI have been obtained from UNCTAD, and are expressed as percentages

of GDP.

• To proxy for size and market potential I employ real GDP per capita and real GDP

growth from PWT 9.

• Measures of the real effective exchange rate have been obtained from IMF and mea-

sures of inflation (a 3-year MA) has been constructed using CPI data from the IMF.

2A brief description of the data can be also found in Prati et al. (2013) and Gugliano et al. (2013).

3

• I proxy the skill of the host country labor force using the percent of population that

has some tertiary education (from Barro and Lee (2001)).

• Corporate taxes have been obtained from World Tax Database (available at the Uni-

versity of Michigan)

• Stock market capitalization and credit to the domestic private sector have been ob-

tained from World Bank

• Finally in order to proxy for the institutional quality of the host country, I use:

– The the protection against risk of expropriation data from Acemoglu et al. (2001)

and classify the countries in my sample as the top 25% performs and the lower

75% performers in terms of this metric.

– Data on the Rule-of-Law (from ICRG) and classify the countries in my sample

as the top 25% performs and the lower 75% performers.

– Data on bureaucratic quality classify the countries in my sample as the top 25%

performs and the lower 75% performers.

3.2 Empirical Models

The unit of analysis is a country-year observation (there are roughly 142 countries and 34

years) and I want to examine how reforms (there are 6 sectors) affect FDI inflows. The basic

specifications I employ are of the form3

FDIit/GDPit = β0 + ρ(FDIit−1/GDPit−1) + β1Reformit−1 + αi + δt + εit. (1)

As this might be plagued by omitted variable bias, I also estimate variations of the following

model:

FDIit/GDPit = β0+ρ(FDIit−1/GDPit−1)+β1Reformit−1+γ′xit−1+αi+ δt+εit, (2)

where αi and δt are country, and year fixed effects, respectively, and xit−1 are country-

specific and time-varying controls to be described below.4

3Strictly speaking the lagged term in equation (1) is hard to justify theoretically. It should simply be taken

as a short-cut to control for temporal dependence in the data.4To make the resulats comparable I estimated all models by OLS in what follows.

4

4 Empirical Findings

4.1 Baseline Results

Tables 1A and 1B report my first estimation results regarding the effects of structural reforms

on FDI. What is obvious – regardless of whether the lagged dependent variable is included

in the regressions – is that there is not much action present. In particular there seems to

be a positive and significant effect of current account liberalizations and of capital account

liberalizations, in particular when restrictions on capital transactions by residents of the host

country are relaxed.

[Insert Tables 1 and 2 about here.]

Tables 2A–2B report similar estimation results when other possible determinants of FDI

are taken into account. These include GDP growth and GDP per capita, openness, the real

exchange rate, and a 3-year moving average of the inflation rate. Table 2A reports results

from a static model, while Table 2B from a model that controls for temporal dependence

in FDI flows. In the static model inflation and openness turn out to be significant in some

specifications.5 In the dynamic model, only inflation remains significant, apart from the

lagged FDI inflow. Again the main finding is that with the exception of the liberalization

of the capital account transactions, the rest of the reforms do not show any effect on FDI

inflows.6

4.2 Extensions: Larger Conditioning Set

In order to further dig into the issue, I explore the effect of two sets of variables. The first is

related to the profitability of FDI looking at the skill of the local labor force and the effect

of corporate taxation. The second relates to the degree of development of the local financial

market, by assessing the effect of the stock market capitalization and the domestic credit to

the private sector. Tables 3A–3C report results obtained by enlarging the conditioning set

5As inflation is a proxy for macroeconomic policy stability, higher inflation tends to be associated with

lower FDI inflows – exactly what the results here show.6In the static specification, a reform in agriculture seems to be negatively associated with FDI inflows. To

the extent that FDI is directed towards industry and/or services this is reasonable.

5

with the percentage of persons that have attended tertiary education and with the corporate

tax rate. When considering only how skilled is the local labor force (Table 3A), I find that

more skilled labor force tends to attract more FDI, but again the only type of reform that

matters is capital account restrictions for residents only. When considering taxation alone

(Table 3B), I find that corporate taxation does not matter much for FDI. The only surprising

result here is that the effect of a liberalization of the securities market leads to a significant

reduction in FDI inflows. The same surprising result remains when I consider the joint effects

of labor force skill and corporate taxation.

[Insert Tables 3A-3C.]

The results assessing the effect of the financial development of the local market are pre-

sented in Tables 4A–4C. Table 4A shows that larger market capitalizations have a positive,

but rather small effect on FDI. In this setting a reform in agriculture tends to decrease FDI,

whereas a reform in the networks (electricity and telecoms) sector leads to higher FDI inflow.

One way to interpret the negative effect of a reform in agriculture is that as the primary sec-

tor becomes less protected it is possible that funds that were initially invested in agriculture

move out of the economy towards more productive (or more protected) sectors elsewhere.

When considering the effect of domestic credit to the private sector, I find that it does not

have any effect on FDI. In addition, the effect of a capital account reform (for residents) is

positive and significant. Finally, when I consider the effect of both the stock market capital-

ization and the domestic credit, I find that only the latter is significant – with its effect being

negative.7

[Insert Tables 4A-4C.]

4.3 Extensions: The Role of Institutions

In Tables 5A–5C I present a set of results where I split the countries in my sample into two

groups (for each institutional quality variable): the top 25% performers and the rest of the

7In some of the specifications in table 4B the sign of domestic credit was negative. Possible collinearity

between domestic credit and market capitalization (corr=0.59) could explain why domestic credit picks up the

significance now.

6

countries. I do so for three different types of institutions, namely: (i) protection against risk

of expropriation; (ii) rule of law; and (iii) bureaucracy quality. With these groups at hand I

seek to estimate – given the rest of the conditioning set – whether the effect of each type of

reform differs across groups of good and bad performers.

When I consider quality of investor protection (Table 5A), I only get significant results

for only two types of reforms: the domestic securities market and the capital account trans-

actions for residents. In particular, I find that a reform in the securities market when the

economy is not among the top 25 performers of investor protection leads to a reduction

in FDI. Instead, a reform regarding the capital account transactions of residents increases

significantly FDI esp. when the country is not among the top 25 performers of investor

protection.

[Insert Table 5A]

Looking at the quality of rule of law (Table 5B), I again get significant results for only

two types of reforms: the capital account transactions for residents and for non-residents. In

particular, I find that a reform regarding the capital account transactions of residents increases

significantly FDI esp. when the country is not among the top 25 performers of law and order.

Instead, a reform of the capital account transactions of residents leads to a reduction of FDI

inflows when the country is among the top 25 performers.

[Insert Table 5B]

The last type of institution I consider is bureaucratic quality (Table 5C), for which I also

get significant results for only two types of reforms: domestic securities market and the

capital account transactions for residents. In particular, I find that a reform in the domestic

securities market lowers significantly FDI esp. when the country is not among the top 25

performers of bureaucratic quality. Instead, a reform of the capital account transactions of

residents leads to an increase of FDI inflows, regardless of whether the country is among the

top 25 performers. The effect in the case of the top 25 performers is quantitatively larger, but

the difference between the two is not statistically significant.

[Insert Table 5C]

7

5 Conclusions

Understanding the influence of structural reforms on attracting more international capital

in the form of FDI requires a careful assessment of different types of reforms and their

interaction with the institutional environment of the host country. A prominent feature of

this paper is the use of a comprehensive dataset on structural reforms. I find that the effect

of structural reforms on FDI is not overwhelming, and it depends on the institutional quality

of the host country.

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9

DependentVariable:FDI/Y (1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11)

L.RI_trade -0.7608(0.5966)

L.RI_CA 1.4479**(0.7057)

L.RI_Agr 0.1389(0.4677)

L.RI_Netw 0.8926(0.7660)

L.RI_df 0.3335(0.9138)

L.RI_bk 0.4550(0.8223)

L.RI_sm -0.2739(0.5612)

L.RI_KA100 0.9237(0.5745)

L.RI_KAres 0.8534*(0.4801)

L.RI_KAnres 0.5954(0.5472)

L.RI_KA 0.2415(0.4004)

Constant 1.7564*** 0.6539 0.8510** 0.8669*** 1.0285*** 1.0070*** 1.1416*** 0.9378*** 0.9907*** 1.0683*** 1.0247***(0.3117) (0.4657) (0.3271) (0.2575) (0.1636) (0.1682) (0.1484) (0.3560) (0.3124) (0.3700) (0.1608)

Observations 3,501 3,618 3,600 4,007 2,668 2,668 2,668 3,618 3,644 3,618 2,668AdjustedR-squared 0.3668 0.3149 0.3173 0.3609 0.4195 0.4197 0.4196 0.3138 0.3141 0.3135 0.4197CountryFE Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes YesTimeFE Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes

Robuststandarderrorsinparentheses.***p<0.01,**p<0.05,*p<0.1

Table1A

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11)VARIABLES fdi_y fdi_y fdi_y fdi_y fdi_y fdi_y fdi_y fdi_y fdi_y fdi_y fdi_y

L.RI_trade -0.5326(0.4361)

L.RI_CA 1.0031*(0.5723)

L.RI_Agr -0.0762(0.2598)

L.RI_Netw 0.4295(0.4046)

L.RI_df -0.0330(0.5613)

L.RI_bk 0.0907(0.5134)

L.RI_sm -0.2992(0.3287)

L.RI_KA100 0.6086(0.4442)

L.RI_KAres 0.5885*(0.3530)

L.RI_KAnres 0.3704(0.4440)

L.RI_KA 0.0637(0.2209)

L.fdi_y 0.3567*** 0.2697*** 0.5571*** 0.5201*** 0.4685*** 0.4684*** 0.4684*** 0.2709*** 0.2710*** 0.2713*** 0.4684***(0.0928) (0.0936) (0.0571) (0.0483) (0.0737) (0.0737) (0.0736) (0.0936) (0.0935) (0.0939) (0.0735)

Constant 1.1300*** 0.4563 0.4195* 0.3940** 0.6130*** 0.5907*** 0.6645*** 0.6658** 0.6879** 0.7622** 0.5900***(0.3020) (0.3696) (0.2152) (0.1824) (0.1294) (0.1331) (0.1404) (0.2973) (0.2755) (0.2950) (0.1450)

Observations 3,500 3,614 3,581 3,989 2,659 2,659 2,659 3,614 3,640 3,614 2,659AdjustedR-squared 0.4355 0.3625 0.4935 0.5265 0.5407 0.5407 0.5409 0.3620 0.3623 0.3618 0.5407CountryFE Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes YesTimeFE Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes YesRobuststandarderrorsinparentheses***p<0.01,**p<0.05,*p<0.1

Table1B

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11)

L.RI_trade -0.2884

(0.8780)

L.RI_CA 0.9856

(1.1869)

L.RI_Agr -1.1911**

(0.5512)

L.RI_Netw 0.5352

(1.0717)

L.RI_df -0.7101

(1.1423)

L.RI_bk -0.3858

(1.1487)

L.RI_sm -0.8287

(0.6253)

L.RI_KA100 0.9429

(0.9913)

L.RI_KAres 1.5061**

(0.6629)

L.RI_KAnres -0.4093

(0.9915)

L.RI_KA -0.1370

(0.4715)

L.lrgdp_pc 0.8114 0.6324 0.3175 0.7271 0.7453 0.7497 0.7721 0.6114 0.6003 0.6596 0.7766

(0.5759) (0.5299) (0.5970) (0.6551) (0.6286) (0.6317) (0.6447) (0.5326) (0.5108) (0.5453) (0.6678)

L.rgdp_gr -0.0397 0.8438 0.1711 0.9314 1.4258 1.3465 1.5464 0.7990 0.8805 0.7919 1.2650

(1.7262) (1.0333) (1.6665) (1.2912) (1.6627) (1.6501) (1.7695) (1.0316) (0.9806) (1.0588) (1.7240)

L.trade_gdp 0.0404* 0.0076 0.0280 0.0117 0.0277* 0.0278* 0.0279* 0.0082 0.0091 0.0088 0.0278*

(0.0239) (0.0114) (0.0290) (0.0142) (0.0148) (0.0148) (0.0146) (0.0114) (0.0111) (0.0118) (0.0149)

L.lreer -0.0325 -0.0084 0.0011 -0.0162 -0.0452 -0.0445 -0.0490 -0.0182 -0.0216 -0.0131 -0.0420

(0.0425) (0.0339) (0.0459) (0.0343) (0.0377) (0.0371) (0.0384) (0.0343) (0.0348) (0.0349) (0.0366)

infl_ma1 -0.6399*** -0.3929 -0.5357** -0.5261** -0.8173*** -0.7977*** -0.8436*** -0.4124 -0.3505 -0.5211** -0.8036***

(0.2103) (0.2610) (0.2541) (0.2174) (0.2143) (0.2127) (0.2437) (0.2504) (0.2526) (0.2487) (0.2342)

Constant -7.8223 -5.4024 -2.7700 -5.9492 -6.5915 -6.7122 -6.7764 -5.1278 -5.3262 -4.9220 -7.0092

(5.0921) (4.7565) (5.1682) (5.8238) (5.8610) (5.8983) (6.0336) (4.7865) (4.6289) (4.9328) (6.2538)

Observations 1,890 1,987 1,823 1,989 1,565 1,565 1,565 1,987 1,987 1,987 1,565

AdjustedR-squared 0.4036 0.4236 0.3614 0.4647 0.4805 0.4803 0.4814 0.4235 0.4264 0.4227 0.4802

CountryFE Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes

TimeFE Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes

Robuststandarderrorsinparentheses

***p<0.01,**p<0.05,*p<0.1

Table2A

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11)

L.RI_trade -0.2316(0.5472)

L.RI_CA 0.6365(0.7753)

L.RI_Agr -0.4874(0.3082)

L.RI_Netw 0.0157(0.5759)

L.RI_df -0.4006(0.6849)

L.RI_bk -0.2325(0.6787)

L.RI_sm -0.4317(0.3668)

L.RI_KA100 0.4363(0.6222)

L.RI_KAres 0.8598**(0.3966)

L.RI_KAnres -0.4064(0.6623)

L.RI_KA -0.0850(0.2821)

L.fdi_y 0.4996*** 0.4615*** 0.5799*** 0.5345*** 0.4843*** 0.4846*** 0.4834*** 0.4615*** 0.4585*** 0.4625*** 0.4846***(0.0650) (0.0526) (0.0615) (0.0454) (0.0424) (0.0421) (0.0416) (0.0523) (0.0519) (0.0523) (0.0418)

L.lrgdp_pc 0.2861 0.4020 0.1412 0.3982 0.3463 0.3481 0.3617 0.3944 0.3860 0.4245 0.3645(0.3715) (0.3384) (0.2962) (0.3484) (0.3533) (0.3543) (0.3649) (0.3412) (0.3290) (0.3486) (0.3820)

L.rgdp_gr -0.5089 0.9745 0.7183 1.2651 0.6770 0.6348 0.7344 0.9421 0.9897 0.9452 0.5855(1.3589) (0.7580) (1.3323) (0.9717) (1.0108) (1.0081) (1.0712) (0.7658) (0.7390) (0.7671) (1.0571)

L.trade_gdp 0.0240 0.0013 0.0177 0.0032 0.0134 0.0134 0.0135 0.0017 0.0022 0.0022 0.0134(0.0182) (0.0067) (0.0221) (0.0083) (0.0085) (0.0085) (0.0084) (0.0067) (0.0065) (0.0069) (0.0086)

L.lreer -0.0154 -0.0036 0.0083 -0.0094 -0.0230 -0.0226 -0.0250 -0.0093 -0.0116 -0.0061 -0.0211(0.0235) (0.0180) (0.0290) (0.0164) (0.0200) (0.0197) (0.0206) (0.0188) (0.0189) (0.0194) (0.0198)

infl_ma1 -0.3348** -0.2104 -0.1984 -0.2409* -0.4754*** -0.4649*** -0.4880*** -0.2375 -0.1950 -0.3031* -0.4688***(0.1286) (0.1691) (0.1517) (0.1295) (0.1365) (0.1345) (0.1531) (0.1619) (0.1621) (0.1613) (0.1441)

Constant -2.8891 -3.3093 -1.6595 -3.2057 -2.8771 -2.9357 -2.9942 -3.1027 -3.2458 -2.9788 -3.1161(3.1480) (3.0876) (2.6732) (3.2001) (3.3188) (3.3359) (3.4508) (3.1025) (3.0044) (3.1884) (3.6091)


Table2B

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11)

L.RI_trade -0.2316(0.5472)

L.RI_CA 0.6365(0.7753)

L.RI_Agr -0.4874(0.3082)

L.RI_Netw 0.0157(0.5759)

L.RI_df -0.4006(0.6849)

L.RI_bk -0.2325(0.6787)

L.RI_sm -0.4317(0.3668)

L.RI_KA100 0.4363(0.6222)

L.RI_KAres 0.8598**(0.3966)

L.RI_KAnres -0.4064(0.6623)

L.RI_KA -0.0850(0.2821)

L.lh 0.3254*** 0.3588*** 0.3688*** 0.2960*** 0.2642*** 0.2514*** 0.2628*** 0.3653*** 0.3465*** 0.3890*** 0.2383***(0.0711) (0.0775) (0.0951) (0.0800) (0.0705) (0.0686) (0.0691) (0.0778) (0.0753) (0.0784) (0.0609)

L.fdi_y 0.4996*** 0.4615*** 0.5799*** 0.5345*** 0.4843*** 0.4846*** 0.4834*** 0.4615*** 0.4585*** 0.4625*** 0.4846***(0.0650) (0.0526) (0.0615) (0.0454) (0.0424) (0.0421) (0.0416) (0.0523) (0.0519) (0.0523) (0.0418)

L.lrgdp_pc 0.2861 0.4020 0.1412 0.3982 0.3463 0.3481 0.3617 0.3944 0.3860 0.4245 0.3645(0.3715) (0.3384) (0.2962) (0.3484) (0.3533) (0.3543) (0.3649) (0.3412) (0.3290) (0.3486) (0.3820)

L.rgdp_gr -0.5089 0.9745 0.7183 1.2651 0.6770 0.6348 0.7344 0.9421 0.9897 0.9452 0.5855(1.3589) (0.7580) (1.3323) (0.9717) (1.0108) (1.0081) (1.0712) (0.7658) (0.7390) (0.7671) (1.0571)

L.trade_gdp 0.0240 0.0013 0.0177 0.0032 0.0134 0.0134 0.0135 0.0017 0.0022 0.0022 0.0134(0.0182) (0.0067) (0.0221) (0.0083) (0.0085) (0.0085) (0.0084) (0.0067) (0.0065) (0.0069) (0.0086)

L.lreer -0.0154 -0.0036 0.0083 -0.0094 -0.0230 -0.0226 -0.0250 -0.0093 -0.0116 -0.0061 -0.0211(0.0235) (0.0180) (0.0290) (0.0164) (0.0200) (0.0197) (0.0206) (0.0188) (0.0189) (0.0194) (0.0198)

infl_ma1 -0.3348** -0.2104 -0.1984 -0.2409* -0.4754*** -0.4649*** -0.4880*** -0.2375 -0.1950 -0.3031* -0.4688***(0.1286) (0.1691) (0.1517) (0.1295) (0.1365) (0.1345) (0.1531) (0.1619) (0.1621) (0.1613) (0.1441)

Constant -4.1956 -4.7498 -3.1401 -4.3940 -3.9380 -3.9451 -4.0495 -4.5692 -4.6367 -4.5406 -4.0728(3.1524) (3.1669) (2.7860) (3.2951) (3.3871) (3.3942) (3.4569) (3.1863) (3.0955) (3.2595) (3.6349)


Table3A

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11)

L.RI_trade -0.1947(0.7473)

L.RI_CA -0.4630(0.9560)

L.RI_Agr 0.1902(0.3992)

L.RI_Netw 1.2867(0.9415)

L.RI_df -1.3846(0.8967)

L.RI_bk -1.0259(0.8031)

L.RI_sm -0.8970*(0.5250)

L.RI_KA100 -0.4955(0.9567)

L.RI_KAres 0.1910(0.6967)

L.RI_KAnres -1.0152(0.9130)

L.RI_KA -0.4480(0.3853)

L.tax -0.0086 -0.0094 -0.0019 -0.0082 -0.0126 -0.0131 -0.0120 -0.0095 -0.0097 -0.0083 -0.0153(0.0141) (0.0149) (0.0151) (0.0148) (0.0145) (0.0146) (0.0146) (0.0149) (0.0151) (0.0150) (0.0150)

L.fdi_y 0.4075*** 0.3792*** 0.4858*** 0.4561*** 0.4500*** 0.4514*** 0.4503*** 0.3796*** 0.3795*** 0.3785*** 0.4521***(0.0601) (0.0632) (0.0425) (0.0460) (0.0508) (0.0505) (0.0495) (0.0632) (0.0625) (0.0634) (0.0504)

L.lrgdp_pc 0.9080 0.5343 0.5297 0.5075 0.3953 0.4077 0.4637 0.5467 0.5547 0.5574 0.5410(0.6152) (0.4291) (0.4232) (0.4439) (0.3888) (0.3988) (0.4219) (0.4309) (0.4328) (0.4224) (0.4511)

L.rgdp_gr 0.6133 1.2844 1.1170 0.9196 0.9348 0.8493 0.9501 1.3151 1.3722 1.3469 0.6969(1.2978) (1.3905) (1.4892) (1.3607) (1.2938) (1.2783) (1.3171) (1.3935) (1.3348) (1.3565) (1.2694)

L.trade_gdp 0.0129 0.0034 0.0061 0.0069 0.0062 0.0063 0.0067 0.0031 0.0032 0.0039 0.0061(0.0133) (0.0110) (0.0156) (0.0128) (0.0123) (0.0124) (0.0119) (0.0113) (0.0109) (0.0116) (0.0125)

L.lreer -0.0037 -0.0398 -0.0392 -0.0196 -0.0098 -0.0115 -0.0251 -0.0361 -0.0388 -0.0355 -0.0202(0.0527) (0.0750) (0.0627) (0.0630) (0.0671) (0.0667) (0.0702) (0.0763) (0.0739) (0.0745) (0.0689)

infl_ma1 -0.2748 -0.3019 -0.2352 -0.1718 -0.3889* -0.3679* -0.3803* -0.3084 -0.2754 -0.3500 -0.3722*(0.2365) (0.2218) (0.2095) (0.2035) (0.1941) (0.1901) (0.2199) (0.2168) (0.2278) (0.2236) (0.1942)

Constant -7.6710 -3.6597 -4.3631 -4.0445 -2.5098 -2.6872 -3.1912 -3.7725 -4.1722 -3.7171 -3.8820(5.7486) (4.1610) (4.0081) (4.1596) (3.7313) (3.8283) (3.9902) (4.1089) (4.1113) (4.0760) (4.2854)

Observations 1,104 1,123 942 1,086 969 969 969 1,123 1,123 1,123 969AdjustedR-squared 0.5339 0.4978 0.4995 0.5610 0.5721 0.5716 0.5720 0.4979 0.4977 0.4988 0.5714CountryFE Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes YesTimeFE Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes YesRobuststandarderrorsinparentheses***p<0.01,**p<0.05,*p<0.1

Table3B

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11)

L.RI_trade -0.1947

(0.7473)

L.RI_CA -0.4630

(0.9560)

L.RI_Agr 0.1902

(0.3992)

L.RI_Netw 1.2867

(0.9415)

L.RI_df -1.3846

(0.8967)

L.RI_bk -1.0259

(0.8031)

L.RI_sm -0.8970*

(0.5250)

L.RI_KA100 -0.4955

(0.9567)

L.RI_KAres 0.1910

(0.6967)

L.RI_KAnres -1.0152

(0.9130)

L.RI_KA -0.4480

(0.3853)

L.lh 0.1301 0.2443** 0.0904 0.0284 0.2269* 0.1941* 0.1805* 0.2467** 0.2142* 0.2675** 0.1371

(0.1033) (0.1178) (0.1075) (0.1342) (0.1155) (0.1097) (0.1017) (0.1204) (0.1144) (0.1154) (0.0937)

L.tax -0.0086 -0.0094 -0.0019 -0.0082 -0.0126 -0.0131 -0.0120 -0.0095 -0.0097 -0.0083 -0.0153

(0.0141) (0.0149) (0.0151) (0.0148) (0.0145) (0.0146) (0.0146) (0.0149) (0.0151) (0.0150) (0.0150)

L.fdi_y 0.4075*** 0.3792*** 0.4858*** 0.4561*** 0.4500*** 0.4514*** 0.4503*** 0.3796*** 0.3795*** 0.3785*** 0.4521***

(0.0601) (0.0632) (0.0425) (0.0460) (0.0508) (0.0505) (0.0495) (0.0632) (0.0625) (0.0634) (0.0504)

L.lrgdp_pc 0.9080 0.5343 0.5297 0.5075 0.3953 0.4077 0.4637 0.5467 0.5547 0.5574 0.5410

(0.6152) (0.4291) (0.4232) (0.4439) (0.3888) (0.3988) (0.4219) (0.4309) (0.4328) (0.4224) (0.4511)

L.rgdp_gr 0.6133 1.2844 1.1170 0.9196 0.9348 0.8493 0.9501 1.3151 1.3722 1.3469 0.6969

(1.2978) (1.3905) (1.4892) (1.3607) (1.2938) (1.2783) (1.3171) (1.3935) (1.3348) (1.3565) (1.2694)

L.trade_gdp 0.0129 0.0034 0.0061 0.0069 0.0062 0.0063 0.0067 0.0031 0.0032 0.0039 0.0061

(0.0133) (0.0110) (0.0156) (0.0128) (0.0123) (0.0124) (0.0119) (0.0113) (0.0109) (0.0116) (0.0125)

L.lreer -0.0037 -0.0398 -0.0392 -0.0196 -0.0098 -0.0115 -0.0251 -0.0361 -0.0388 -0.0355 -0.0202

(0.0527) (0.0750) (0.0627) (0.0630) (0.0671) (0.0667) (0.0702) (0.0763) (0.0739) (0.0745) (0.0689)

infl_ma1 -0.2748 -0.3019 -0.2352 -0.1718 -0.3889* -0.3679* -0.3803* -0.3084 -0.2754 -0.3500 -0.3722*

(0.2365) (0.2218) (0.2095) (0.2035) (0.1941) (0.1901) (0.2199) (0.2168) (0.2278) (0.2236) (0.1942)

Constant -8.1931 -4.6406 -4.7259 -4.1585 -3.4209 -3.4665 -3.9157 -4.7631 -5.0321 -4.7909 -4.4323

(5.6373) (4.1090) (3.8968) (4.1535) (3.7501) (3.8179) (3.9643) (4.0930) (4.0893) (4.0702) (4.2656)

Observations 1,104 1,123 942 1,086 969 969 969 1,123 1,123 1,123 969





***p<0.01,**p<0.05,*p<0.1

Table3C

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11)

L.RI_trade -0.5532

(1.1000)

L.RI_CA 2.4422

(1.8929)

L.RI_Agr -2.5442**

(1.1745)

L.RI_Netw 1.6374*

(0.8715)

L.RI_df 0.1799

(1.2144)

L.RI_bk 0.2989

(1.1836)

L.RI_sm -0.4309

(0.7523)

L.RI_KA100 0.7654

(1.5090)

L.RI_KAres 1.8581

(1.2085)

L.RI_KAnres -0.7606

(1.5486)

L.RI_KA 0.1988

(0.4320)

L2.mcap_gdp -0.0039 0.0058* -0.0004 -0.0000 0.0047* 0.0048** 0.0045* 0.0054* 0.0050* 0.0053* 0.0047**

(0.0085) (0.0030) (0.0051) (0.0035) (0.0023) (0.0023) (0.0022) (0.0027) (0.0027) (0.0028) (0.0023)

L.fdi_y 0.4699*** 0.3789*** 0.5356*** 0.4350*** 0.4365*** 0.4363*** 0.4367*** 0.3850*** 0.3797*** 0.3872*** 0.4361***

(0.0873) (0.0611) (0.0967) (0.0582) (0.0507) (0.0505) (0.0510) (0.0602) (0.0596) (0.0605) (0.0509)

L.lrgdp_pc -0.0407 0.7731 -1.3812 0.5154 0.5685 0.5869 0.5532 0.8424 0.6947 0.7623 0.5846

(1.2764) (1.4841) (1.2309) (1.4065) (1.4099) (1.4110) (1.4162) (1.4152) (1.4991) (1.3416) (1.4241)

L.rgdp_gr -2.1236 1.5126 1.1972 1.6205 0.6573 0.6117 0.8350 1.5866 1.8354 1.5799 0.6248

(5.2145) (3.4505) (5.7098) (4.2016) (3.5694) (3.5810) (3.6916) (3.4355) (3.5655) (3.3203) (3.6386)

L.trade_gdp 0.0590 0.0167 0.0944 0.0259 0.0195 0.0195 0.0195 0.0170 0.0189 0.0157 0.0198

(0.0433) (0.0138) (0.0619) (0.0175) (0.0150) (0.0150) (0.0146) (0.0137) (0.0129) (0.0150) (0.0146)

L.lreer -0.0255 -0.1201* 0.0200 -0.0698 -0.1089* -0.1115* -0.1166* -0.1215** -0.1581** -0.1158* -0.1075*

(0.1098) (0.0637) (0.0862) (0.0585) (0.0608) (0.0643) (0.0688) (0.0586) (0.0621) (0.0605) (0.0568)

infl_ma1 -2.8424* -1.8373 -4.4369** -2.8448 -2.5694 -2.5442 -2.8279 -2.1427 -1.8095 -2.3756 -2.4932

(1.4573) (1.7139) (2.1329) (2.2960) (1.6980) (1.6372) (1.7992) (1.6846) (1.7222) (1.6566) (1.7565)

Constant -2.2539 -8.8830 9.4788 -5.5630 -5.5129 -5.7060 -5.0394 -8.2388 -7.6743 -6.4655 -5.7161

(12.0997) (13.6019) (11.4478) (13.0137) (13.1655) (13.1939) (13.3769) (12.8439) (13.5323) (12.3592) (13.3213)

Observations 873 849 703 810 793 793 793 849 849 849 793





***p<0.01,**p<0.05,*p<0.1

Table4A

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11)

L.RI_trade -0.0525

(0.6258)

L.RI_CA 0.6377

(0.7594)

L.RI_Agr -0.4499

(0.3299)

L.RI_Netw -0.1731

(0.5994)

L.RI_df -0.1593

(0.6509)

L.RI_bk -0.0009

(0.6275)

L.RI_sm -0.3944

(0.3398)

L.RI_KA100 0.5553

(0.5806)

L.RI_KAres 0.8532**

(0.3780)

L.RI_KAnres -0.1987

(0.5909)

L.RI_KA -0.1181

(0.2705)

L.d_cred_priv 0.0029 0.0079 -0.0061 -0.0004 -0.0068 -0.0068 -0.0070 0.0078 0.0078 0.0081 -0.0069

(0.0111) (0.0085) (0.0110) (0.0082) (0.0043) (0.0043) (0.0044) (0.0086) (0.0085) (0.0087) (0.0043)

L.fdi_y 0.4963*** 0.4579*** 0.6060*** 0.5511*** 0.4955*** 0.4956*** 0.4943*** 0.4573*** 0.4540*** 0.4589*** 0.4954***

(0.0770) (0.0663) (0.0660) (0.0529) (0.0557) (0.0552) (0.0556) (0.0660) (0.0655) (0.0660) (0.0557)

L.lrgdp_pc 0.1371 0.1560 0.1863 0.3395 0.3486 0.3515 0.3625 0.1466 0.1449 0.1648 0.3664

(0.3800) (0.3546) (0.3148) (0.3746) (0.4019) (0.4035) (0.4115) (0.3562) (0.3463) (0.3616) (0.4250)

L.rgdp_gr -0.4180 1.2822 0.5424 1.1409 0.3585 0.3233 0.4545 1.2454 1.2866 1.2419 0.3157

(1.4528) (0.8457) (1.3553) (0.9494) (0.8936) (0.8916) (0.9552) (0.8482) (0.8199) (0.8526) (0.9471)

L.trade_gdp 0.0253 -0.0006 0.0191 0.0039 0.0127* 0.0128* 0.0128* -0.0000 0.0005 0.0004 0.0127*

(0.0210) (0.0075) (0.0238) (0.0089) (0.0074) (0.0074) (0.0073) (0.0074) (0.0072) (0.0077) (0.0075)

L.lreer -0.0190 -0.0147 0.0105 -0.0105 -0.0154 -0.0152 -0.0174 -0.0205 -0.0225 -0.0174 -0.0130

(0.0269) (0.0199) (0.0347) (0.0184) (0.0201) (0.0197) (0.0208) (0.0219) (0.0219) (0.0223) (0.0192)

infl_ma1 -0.3516*** -0.2758* -0.1762 -0.2558** -0.4623*** -0.4538*** -0.4849*** -0.2932* -0.2627 -0.3517** -0.4750***

(0.1205) (0.1577) (0.1722) (0.1268) (0.1390) (0.1373) (0.1547) (0.1603) (0.1601) (0.1552) (0.1481)

Constant -1.7726 -1.1639 -1.9210 -2.6724 -2.6904 -2.7532 -2.7469 -1.0011 -1.1411 -0.8320 -2.8562

(3.4798) (3.1690) (3.2909) (3.4009) (3.6587) (3.6813) (3.7615) (3.2191) (3.1484) (3.2877) (3.8905)

Observations 1,835 1,928 1,778 1,941 1,519 1,519 1,519 1,928 1,928 1,928 1,519





***p<0.01,**p<0.05,*p<0.1

Table4B

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11)

L.RI_trade -0.1647

(1.2933)

L.RI_CA 1.9948

(1.8175)

L.RI_Agr -2.9178**

(1.3169)

L.RI_Netw 1.3780

(0.9440)

L.RI_df -0.1893

(0.9388)

L.RI_bk 0.1070

(0.9394)

L.RI_sm -0.8553

(0.6920)

L.RI_KA100 1.1155

(1.6524)

L.RI_KAres 1.6457

(1.3377)

L.RI_KAnres 0.0381

(1.3349)

L.RI_KA 0.1112

(0.3521)

L2.mcap_gdp -0.0058 0.0027 -0.0015 -0.0011 0.0011 0.0013 0.0009 0.0024 0.0021 0.0024 0.0013

(0.0072) (0.0033) (0.0040) (0.0037) (0.0027) (0.0027) (0.0027) (0.0031) (0.0031) (0.0032) (0.0027)

L.d_cred_priv -0.0187 -0.0070 -0.0314** -0.0217** -0.0204** -0.0203** -0.0211** -0.0074 -0.0064 -0.0079 -0.0203**

(0.0173) (0.0147) (0.0137) (0.0092) (0.0084) (0.0084) (0.0084) (0.0147) (0.0149) (0.0146) (0.0084)

L.fdi_y 0.4478*** 0.3621*** 0.5396*** 0.4083*** 0.4411*** 0.4406*** 0.4403*** 0.3659*** 0.3616*** 0.3685*** 0.4404***

(0.0942) (0.0860) (0.0984) (0.0887) (0.0794) (0.0790) (0.0792) (0.0843) (0.0844) (0.0841) (0.0798)

L.lrgdp_pc 0.2871 0.6406 -0.7575 0.8040 0.5926 0.6247 0.6335 0.7103 0.5842 0.6931 0.6313

(1.4507) (1.5843) (1.1884) (1.5093) (1.4210) (1.4317) (1.4182) (1.5279) (1.6080) (1.4641) (1.4563)

L.rgdp_gr -3.1699 0.7517 -0.6762 0.0998 -0.5956 -0.6967 -0.5016 0.8398 1.0107 0.8175 -0.7076

(5.5693) (3.7031) (4.7632) (3.9579) (3.5233) (3.5403) (3.5909) (3.7199) (3.8449) (3.6054) (3.5974)

L.trade_gdp 0.0658 0.0186 0.1000 0.0312 0.0211 0.0210 0.0209 0.0195 0.0208 0.0184 0.0212

(0.0486) (0.0141) (0.0681) (0.0205) (0.0145) (0.0145) (0.0139) (0.0137) (0.0134) (0.0146) (0.0143)

L.lreer 0.0667 -0.0637 0.1492 0.0284 -0.0073 -0.0105 -0.0246 -0.0698 -0.0999 -0.0577 -0.0091

(0.1248) (0.0651) (0.1182) (0.0569) (0.0447) (0.0466) (0.0527) (0.0669) (0.0749) (0.0604) (0.0425)

infl_ma1 -2.3896 -1.6975 -3.7583* -2.3419 -1.9984 -1.9183 -2.3332 -1.8407 -1.6623 -2.0218 -1.8745

(1.5017) (1.6055) (2.2028) (2.4315) (1.6710) (1.6273) (1.7173) (1.6199) (1.6340) (1.5959) (1.7615)

Constant -5.4923 -7.1850 4.1552 -8.0026 -5.1161 -5.5124 -5.0131 -7.1138 -6.3914 -6.2002 -5.6077

(14.5267) (14.2548) (11.6951) (13.9425) (13.1015) (13.2217) (13.1593) (13.6642) (14.2763) (13.3107) (13.5102)

Observations 838 818 677 781 763 763 763 818 818 818 763





***p<0.01,**p<0.05,*p<0.1

Table4C

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11)

L.fdi_y 0.5146*** 0.4685*** 0.5983*** 0.5319*** 0.4824*** 0.4832*** 0.4801*** 0.4682*** 0.4655*** 0.4689*** 0.4819***

(0.0686) (0.0548) (0.0781) (0.0525) (0.0427) (0.0425) (0.0427) (0.0554) (0.0548) (0.0555) (0.0411)

L.lrgdp_pc 0.1943 0.3980 0.0094 0.1696 0.1362 0.1478 0.1630 0.4726 0.4295 0.5178 0.2490

(0.3949) (0.3713) (0.2959) (0.3215) (0.3292) (0.3319) (0.3182) (0.3749) (0.3601) (0.3821) (0.3701)

L.rgdp_gr -0.5455 0.9918 0.9336 1.5306 0.5649 0.5394 0.5658 0.9757 1.0297 0.9545 0.3276

(1.3769) (0.7548) (1.3837) (1.0010) (0.8940) (0.8998) (0.9486) (0.7588) (0.7279) (0.7715) (0.9646)

L.trade_gdp 0.0237 0.0008 0.0206 0.0044 0.0134* 0.0132 0.0143* 0.0012 0.0017 0.0017 0.0131

(0.0188) (0.0069) (0.0244) (0.0089) (0.0080) (0.0081) (0.0079) (0.0068) (0.0066) (0.0071) (0.0083)

L.lreer -0.0206 -0.0088 0.0128 -0.0180 -0.0446* -0.0430* -0.0429* -0.0049 -0.0108 0.0008 -0.0308

(0.0244) (0.0196) (0.0305) (0.0164) (0.0237) (0.0237) (0.0218) (0.0197) (0.0195) (0.0203) (0.0186)

infl_ma1 -0.3784** -0.2555 -0.2810 -0.4430** -0.5457*** -0.5380*** -0.5365*** -0.2397 -0.2089 -0.3024 -0.5585***

(0.1442) (0.1878) (0.1703) (0.1927) (0.1605) (0.1586) (0.1786) (0.1860) (0.1791) (0.1852) (0.1588)

0b.d_expr#c.lRI_trade -0.3699

(0.5770)

1.d_expr#c.lRI_trade 1.8688

(1.9205)

0b.d_expr#c.lRI_CA 0.4119

(0.9228)

1.d_expr#c.lRI_CA 0.9274

(1.1073)

1.d_expr#c.lRI_Agr -0.2487

(0.5530)

0b.d_expr#c.lRI_Netw -0.6189

(0.7409)

1.d_expr#c.lRI_Netw 0.6491

(0.6460)

0b.d_expr#c.lRI_df -0.9940

(0.7238)

1.d_expr#c.lRI_df 0.2753

(0.9024)

0b.d_expr#c.lRI_bk -0.8602

(0.6906)

1.d_expr#c.lRI_bk 0.3043

(0.8924)

0b.d_expr#c.lRI_sm -0.9697*

(0.4991)

1.d_expr#c.lRI_sm 0.3143

(0.4175)

0b.d_expr#c.lRI_KA100 0.7594

(0.7951)

1.d_expr#c.lRI_KA100 -0.0707

(0.8557)

0b.d_expr#c.lRI_KAres 0.9774**

(0.4848)

1.d_expr#c.lRI_KAres 0.7158

(0.7651)

0b.d_expr#c.lRI_KAnres 0.0090

(0.8307)

1.d_expr#c.lRI_KAnres -1.1750

(0.8074)

0b.d_expr#c.lRI_KA -0.5124

(0.3198)

1.d_expr#c.lRI_KA 0.5183

(0.4432)

Constant -2.6767 -3.2551 -0.7251 -1.3452 -0.9032 -1.0121 -1.2551 -3.8185 -3.6500 -3.8293 -2.0040

(3.2728) (3.3629) (2.4840) (2.9721) (3.0705) (3.1090) (3.0141) (3.4063) (3.2615) (3.5000) (3.5124)

Observations 1,722 1,870 1,620 1,786 1,522 1,522 1,522 1,870 1,870 1,870 1,522





***p<0.01,**p<0.05,*p<0.1

Table5A

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11)

L.fdi_y 0.4999*** 0.4635*** 0.5791*** 0.5202*** 0.4818*** 0.4825*** 0.4795*** 0.4624*** 0.4594*** 0.4638*** 0.4822***(0.0661) (0.0530) (0.0727) (0.0499) (0.0431) (0.0428) (0.0421) (0.0533) (0.0527) (0.0533) (0.0417)

L.lrgdp_pc 0.2227 0.4064 0.0041 0.2259 0.2379 0.2493 0.2456 0.4711 0.4350 0.5084 0.3141(0.3759) (0.3500) (0.2969) (0.3240) (0.3388) (0.3413) (0.3382) (0.3519) (0.3367) (0.3633) (0.3800)

L.rgdp_gr -0.5708 1.0168 0.8106 1.4253 0.5793 0.5445 0.5698 1.0038 1.0559 0.9801 0.3918(1.3771) (0.7455) (1.3781) (0.9902) (0.9218) (0.9207) (0.9664) (0.7542) (0.7170) (0.7716) (0.9809)

L.trade_gdp 0.0240 0.0009 0.0209 0.0047 0.0128 0.0128 0.0132 0.0019 0.0023 0.0021 0.0127(0.0186) (0.0068) (0.0242) (0.0090) (0.0082) (0.0082) (0.0081) (0.0067) (0.0065) (0.0070) (0.0084)

L.lreer -0.0158 -0.0067 0.0120 -0.0152 -0.0356 -0.0337 -0.0385* -0.0042 -0.0100 0.0004 -0.0274(0.0229) (0.0191) (0.0305) (0.0163) (0.0227) (0.0224) (0.0218) (0.0195) (0.0193) (0.0202) (0.0191)

infl_ma1 -0.3288** -0.2122 -0.2446 -0.3629** -0.5169*** -0.5040*** -0.5237*** -0.1910 -0.1683 -0.2575 -0.5117***(0.1315) (0.1728) (0.1585) (0.1426) (0.1376) (0.1317) (0.1641) (0.1690) (0.1660) (0.1680) (0.1399)

0b.d_law#c.lRI_trade -0.2454(0.5834)

1.d_law#c.lRI_trade 0.0839(1.1115)

0b.d_law#c.lRI_CA 0.6492(0.8757)

1.d_law#c.lRI_CA 0.7766(1.1673)

1.d_law#c.lRI_Agr -0.1926(0.5187)

0b.d_law#c.lRI_Netw -0.3912(0.7771)

1.d_law#c.lRI_Netw 0.4423(0.6299)

0b.d_law#c.lRI_df -0.6957(0.7936)

1.d_law#c.lRI_df 0.0114(0.7884)

0b.d_law#c.lRI_bk -0.5298(0.8066)

1.d_law#c.lRI_bk 0.0732(0.7593)

0b.d_law#c.lRI_sm -0.7380(0.4973)

1.d_law#c.lRI_sm 0.1857(0.4553)

0b.d_law#c.lRI_KA100 0.9438(0.7379)

1.d_law#c.lRI_KA100 -0.3560(0.8618)

0b.d_law#c.lRI_KAres 1.1521**(0.4510)

1.d_law#c.lRI_KAres 0.4508(0.8101)

0b.d_law#c.lRI_KAnres 0.1086(0.7804)

1.d_law#c.lRI_KAnres -1.3994*(0.8075)

0b.d_law#c.lRI_KA -0.2628(0.3025)

1.d_law#c.lRI_KA 0.2603(0.4630)

Constant -2.4252 -3.3680 -0.6546 -1.8433 -1.8318 -1.9628 -1.9655 -3.8019 -3.6926 -3.7287 -2.6097(3.0840) (3.1709) (2.5089) (3.0043) (3.1900) (3.2231) (3.2112) (3.2064) (3.0624) (3.3346) (3.6078)


Table5B

(1) (2) (3) (4) (5) (6) (7) (8) (9) (10) (11)

L.fdi_y 0.4997*** 0.4631*** 0.5790*** 0.5162*** 0.4794*** 0.4804*** 0.4756*** 0.4633*** 0.4597*** 0.4646*** 0.4803***

(0.0659) (0.0532) (0.0727) (0.0500) (0.0437) (0.0435) (0.0428) (0.0528) (0.0523) (0.0530) (0.0420)

L.lrgdp_pc 0.2164 0.3940 0.0104 0.2071 0.2087 0.2223 0.2125 0.4126 0.3770 0.4659 0.3061

(0.3743) (0.3544) (0.2971) (0.3067) (0.3222) (0.3253) (0.3212) (0.3477) (0.3339) (0.3575) (0.3728)

L.rgdp_gr -0.5663 1.0111 0.8132 1.4387 0.5850 0.5528 0.6185 0.9849 1.0364 0.9635 0.3706

(1.3748) (0.7419) (1.3787) (0.9885) (0.9076) (0.9087) (0.9617) (0.7520) (0.7247) (0.7652) (0.9820)

L.trade_gdp 0.0240 0.0009 0.0208 0.0044 0.0132 0.0130 0.0146* 0.0014 0.0019 0.0020 0.0131

(0.0185) (0.0068) (0.0242) (0.0088) (0.0080) (0.0081) (0.0080) (0.0067) (0.0066) (0.0070) (0.0083)

L.lreer -0.0181 -0.0090 0.0124 -0.0170 -0.0421* -0.0400* -0.0436* -0.0107 -0.0165 -0.0033 -0.0295

(0.0230) (0.0194) (0.0303) (0.0161) (0.0230) (0.0228) (0.0220) (0.0189) (0.0188) (0.0200) (0.0186)

infl_ma1 -0.3335** -0.2205 -0.2440 -0.3871*** -0.5225*** -0.5127*** -0.5224*** -0.2238 -0.1977 -0.2749 -0.5208***

(0.1318) (0.1735) (0.1584) (0.1332) (0.1373) (0.1328) (0.1603) (0.1674) (0.1627) (0.1688) (0.1385)

0b.d_bq#c.lRI_trade -0.2719

(0.5863)

1.d_bq#c.lRI_trade 0.6500

(1.2217)

0b.d_bq#c.lRI_CA 0.5572

(0.7832)

1.d_bq#c.lRI_CA 0.9871

(1.3841)

1.d_bq#c.lRI_Agr -0.3349

(0.5919)

0b.d_bq#c.lRI_Netw -0.4863

(0.7569)

1.d_bq#c.lRI_Netw 0.6567

(0.6130)

0b.d_bq#c.lRI_df -0.7716

(0.7826)

1.d_bq#c.lRI_df 0.3726

(0.8369)

0b.d_bq#c.lRI_bk -0.6156

(0.7863)

1.d_bq#c.lRI_bk 0.3853

(0.8181)

0b.d_bq#c.lRI_sm -0.9143*

(0.4597)

1.d_bq#c.lRI_sm 0.4695

(0.4610)

0b.d_bq#c.lRI_KA100 0.6234

(0.7617)

1.d_bq#c.lRI_KA100 0.3956

(0.8112)

0b.d_bq#c.lRI_KAres 0.8502*

(0.4816)

1.d_bq#c.lRI_KAres 1.1953*

(0.7032)

0b.d_bq#c.lRI_KAnres -0.0728

(0.7801)

1.d_bq#c.lRI_KAnres -0.9469

(0.8301)

0b.d_bq#c.lRI_KA -0.3748

(0.3206)

1.d_bq#c.lRI_KA 0.4494

(0.4203)

Constant -2.5233 -3.2639 -0.7007 -1.6464 -1.5991 -1.7302 -1.7487 -3.3029 -3.2042 -3.3657 -2.5416

(3.0860) (3.1678) (2.5000) (2.8650) (3.0177) (3.0563) (3.0484) (3.1722) (3.0474) (3.2790) (3.5342)

Observations 1,823 1,945 1,694 1,860 1,556 1,556 1,556 1,945 1,945 1,945 1,556





***p<0.01,**p<0.05,*p<0.1

Table5C

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