Institutions and FDI: evidence from developed and developing countries

Financial Innovation

Table 13 Regulatory Quality and FDI

Variables	Low Income Countries		Lower Middle income Countries		High Income Countries		Upper Middle income Countries
Variables	FEM	GMM	FEM	GMM	FEM	GMM	FEM	GMM
(lnFDI)_t − 1		0.576^a (0.000)		0.638^a (0.000)		0.331^a (0.000)		0.623^a (0.000)
Trade	0.007^a (0.001)	0.035^b (0.029)	0.072^a (0.000)	0.020^a (0.000)	0.133^a (0.000)	0.017^a (0.000)	0.041 (0.358)	0.049^a (0.003)
lnMobile	-0.368^b (0.032)	0.326 (0.120)	0.123 (0.237)	0.023 (0.774)	0.875^a (0.000)	0.196^c (0.109)	2.905^b (0.027)	0.455^c (0.107)
LnGDP per capita	11.794^b (0.023)	3.399^a (0.000)	-1.307 (0.269)	7.374^a (0.000)	-9.379 (0.650)	4.168 (0.150)	7.136 (0.432)	10.658 (0.113)
Inflation	0.000^b (0.026)	0.000 (0.723)	0.018 (0.304)	-0.015 (0.383)	0.006 (0.898)	-0.033 (0.088)	0.367 (0.224)	-0.215^c (0.105)
Agriculture value added	-0.490^b (0.028)	0.036 (0.355)	-0.093^b (0.045)	0.015 (0.502)	-0.137 (0.149)	-0.035 (0.417)	0.249 (0.850)	0.522^b (0.038)
Regulatory Quality	-1.727 (0.654)	5.859 (0.188)	1.517 (0.219)	0.195 (0.114)	1.575^c (0.053)	3.130^a (0.009)	0.543 (0.909)	0.605^c (0.064)
Constant	51.803^b (0.036)	15.552^c (0.094)	10.090 (0.272)	-2.127^a (0.000)	7.613^a (0.000)	2.833^c (0.079)	6.424 (0.471)	13.969^b (0.029)
AR(1)		0.000		0.000	0.387	0.000		0.046
AR(2)		0.335		0.112		0.194		0.226
Sargan		0.256		0.611		0.367		0.275

Note: ^a, ^b and ^c denote significance at 1%, 5% and 10% level respectively. Parenthesis show P-values