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Table 3 Dynamic panel data estimation, one-step system GMM: Interaction effect of OFFCR and FD on HEWE

From: The interaction effect of foreign capital inflows and financial development on economic welfare in sub-Saharan Africa

HEWE
Regressors Model I Model II Model III Model IV Model V
L1 HEWE 1.012***(0.057) 1.073***(0.094) 0.918***(0.174) 0.937***(0.123) 0.943***(0.107)
OFFCR −0.010(0.007) −0.011(0.009) 0.042(0.049) −0.010(0.011) − 0.068(0.576)
L1 OFFCR 0.010(0.010) 0.012(0.011) −0.007(0.39) 0.013*(0.007) 0.077(0.396)
DOMCR 0.129(0.104) 0.346*(0.188)
L1 DOMCR −0.260(0.162) −0.253**(0.123)
MS 0.377***(0.109) 0.387***(0.127)
L1 MS −0.255(0.352) −0.283(0.260)
OFFCR*DOMCR −0.016(0.015)
L1 OFFCR*DOMCR 0.007(0.014)
OFFCR*MS 0.016(0.164)
L1 OFFCR*MS −0.019(0.115)
Openness 0.017(0.145) −0.023(0.179) 0.150(0.290) 0.084(0.150) 0.081(0.122)
Inflation −.014***(0.003) −0.015***(0.002) 0.002(0.005) −0.001(0.004) −0.001(0.004)
AR 1 0.158 0.178 0.062 0.079 0.073
AR 2 0.261 0.292 0.295 0.274 0.121
Hansen 0.035 0.166 0.276 0.124 0.221
  1. Note: Values in parenthesis denote the robust standard errors of respective estimates. ***p < 0.01 (1%), **p < 0.05 (5%) and *p < 0.10 (10%) denote the level of significance. Time dummies from 2000 to 2013 not reported. Number of observations: N = 23; T = 14. Official Credit (OFFCR) is used as indicator for Foreign Capital Inflows (FCF); Domestic Credit (DOMCR) and Money Supply (MS) are used as indicators for Financial Development (FD) in models (II, III) and (IV, V) respectively. The use of financial development’s proxies in separate models stems from their high correlation, which may bias the parameter estimates; the same applies to the proxies of foreign capital inflows (Appendix 8 in Table 3). Models III and V in both Tables are the choice models because they include the interaction terms, which are the variables of interest