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Table 5 Empirical results

From: Effect of interest rate on economic performance: evidence from Islamic and non-Islamic economies

Variable Non-Islamic countries Islamic countries
Model 1 Model 2 Model 3 Model 4
Saving Investment Saving Investment
Random effect GMM Random effect GMM Random effect GMM Random effect GMM
Constant 9.153 (0.605) -------- 16.875 (0.045) --------- −159.500 (0.139) --------- 20.272 (0.0071) ---------
Real interest rate 0.178 (0.106) 0.106 (0.037) −0.147 (0.042) −0.188 (0.041) 0.153 (0.489) 0.036 (0.845) −0.192 (0.204) −0.282 (0.032)
National expenditure 1.48E-14 (0.021) −9.37E- 15 (0.000) 3.86E-15 (0.339) −7.96E- 16 (0.813) 7.24E-16 (0.255) −1.16E-15 (0.011) 9.28E16 (0.021) 8.01E-17 (0.805)
Remittances received −1.36E-10 (0.788) 4.23E-10 (0.361) −9.23E-11 (0.707) 6.48E-11 (0.932) −5.52E-10 (0.1319) −3.15E-10 (0.024) 4.98E-11 (0.796) 3.14E-10 (0.001)
Domestic credit provided by banks −0.087 (0.191) −0.047 (0.313) −0.035 (0.335) −0.178 (0.045) −0.284 (0.017) −0.090 (0.265) −0.009 (0.857) −0.019 (0.762)
Inflation 0.034 (0.650) 0.103 (0.011) −0.091 (0.089) −0.161 (0.099) 0.138 (0.55) 0.247 (0.289) −0.219 (0.175) −0.252 (0.059)
Per capita income 1.195 (0.406) 1.98E-06 (0.018) 0.721 (0.261) 3.80E-07 (0.379) 16.201 (0.098) 1.43E-06 (0.000) 0.067 (0.902) −5.51E-08 (0.555)
Trade −0.098 (0.052) 0.041 (0.134) 0.043 (0.128) 0.076 (0.048) 0.107 (0.07) −0.055 (0.277) 0.091 (0.002) 0.107 (0.000)
R 2 0.92 --------- 0.77 --------- 0.974 --------- 0.77 ---------
F-statistic 3.038 (0.005) --------- 2.756 (0.024) --------- 158.437 (0.000) --------- 2.653 (0.013) ----------
No. of
Instruments
--------- 20 -------- 22 ----------- 20 ----------- 22
Sargan test --------- 11.053 (0.438) --------- 10.629 (0.642) --------- 7.272 (0.776) --------- 4.918 (0.977)
Arellano–Bond test, AR (1) --------- −1.524 (0.127) --------- −2.789 (0.005) --------- −2.173 (0.029) --------- −2.520 (0.011)
Arellano–Bond test, AR (2) ---------- −0.967 (0.333) ---------- −0.859 (0.390) ----------- −1.304 (0.192) ----------- −1.683 (0.159)
  1. Note: The figures in parenthesis are the p-values of the t-statistics
  2. System GMM instruments: Arellano–Bond type - twice-lagged dependent variable for Models 1 and 3, once-lagged dependent variable for Models 2 and 4, and once-lagged other explanatory variables for all models
  3. In Models 1 and 3 (random effect), we use twice-lagged GDS (dependent variable), once-lagged DCBS, and log of GPCC
  4. In Models 2 and 4 (random effect), we use log of GPCC