Institutions and FDI: evidence from developed and developing countries

Financial Innovation

Table 15 Voice and Accountability 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		0.568^a (0.000)		0.682^a (0.000)		0.302^a (0.000)		0.606^a (0.001)
Trade	0.010 (0.200)	0.310^c (0.053)	0.073^a (0.000)	0.019^a (0.003)	0.134^a (0.000)	0.019^a (0.000)	0.360 (0.411)	0.051^a (0.002)
lnMobile	0.397 (0.228)	0.334^c (0.107)	0.044 (0.669)	0.130 (0.212)	0.813^a (0.000)	0.154 (0.318)	3.176^b (0.015)	0.492 (0.135)
LnGDP per capita	12.321 (0.211)	7.917^a (0.001)	0.377 (0.748)	2.199^a (0.001)	-8.834 (0.210)	5.303 (0.120)	8.467 (0.331)	12.889 (0.112)
Inflation	-0.002^c (0.063)	0.000 (0.868)	-0.018 (0.317)	-0.070^b (0.045)	0.000 (0.946)	-0.002 (0.930)	0.375 (0.214)	-0.149^b (0.044)
Agriculture value added	-0.498^b (0.014)	0.038 (0.316)	-0.100^b (0.032)	0.065^c (0.072)	-0.169^c (0.072)	-0.017 (0.778)	0.116 (0.930)	0.012 (0.959)
Voice and accountability	2.267 (0.508)	3.128 (0.274)	-1.910 (0.107)	5.839 (0.116)	0.275 (0.739)	5.950^a (0.006)	1.458^b (0.040)	2.763^b (0.037)
Constant	55.536 (0.341)	18.696^b (0.040)	1.821 (0.842)	11.202^b (0.024)	8.148^a (0.000)	5.236^b (0.023)	8.319 (0.423)	7.347 (0.695)
AR(1)		0.000		0.000	0.385	0.000		0.000
AR(2)		0.340		0.093		0.389		0.224
Sargan		0.333		0.345		0.257		0.119

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