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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