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Table 14 Rule of Law and FDI

From: Institutions and FDI: evidence from developed and developing countries

Variables Low Income Countries Lower Middle income Countries High income countries Upper middle income countries
FEM GMM FEM GMM FEM GMM FEM GMM
(lnFDI)t − 1   0.575a (0.000)   0.657a (0.000)   0.304a (0.000)   0.607a (0.000)
Trade 0.010a (0.003) 0.031c (0.052) 0.073a (0.000) 0.018a (0.002) 0.133a (0.000) 0.017a (0.001) 0.027 (0.534) 0.045b (0.014)
lnMobile 0.397b (0.022) 0.338c (0.106) 0.108 (0.300) 0.038 (0.693) 0.909a (0.000) 0.041 (0.786) 3.698a (0.005) 0.294 (0.356)
LnGDP per capita 12.320b (0.021) 7.620a (0.001) -1.170 (0.326) 3.384b (0.038) 9.628a (0.000) 3.319a (0.000) 7.257c (0.059) 5.116b (0.043)
Inflation 0.000c (0.063) 0.000 (0.787) -0.018 (0.302) -0.014 (0.425) 0.000 (0.930) -0.005 (0.830) 0.345 (0.250) -0.095a (0.003)
Agriculture value added -0.498b (0.014) 0.037 (0.355) -0.101b (0.031) 0.008 (0.725) -0.149 (0.112) -0.062 (0.282) -0.145 (0.912) 0.067 (0.872)
Rule of law -2.368 (0.508) 5.171 (0.172) 1.132 (0.147) 6.451c (0.105) 2.685a (0.007) 3.893b (0.030) 6.818a (0.001) 4.719a (0.002)
Constant 5.536 (0.341) 17.812c (0.055) 9.084 (0.329) 2.075c (0.069) 7.307a (0.000) 10.143b (0.034) 14.791c (0.100) 18.301b (0.042)
AR(1)   0.000   0.000 0.390 0.000   0.0450
AR(2)   0.394   0.114   0.481   0.2240
Sargan   0.210   0.382   0.526   0.1830
  1. Note: a, b and c denote significance at 1%, 5% and 10% level respectively. Parenthesis show P-values