Table 5.

Epidemics and entrepreneurship: robustness checks 3 and 4 (accounting for potential simultaneity and nonlinearities)

	Accounting for simultaneity			Accounting for nonlinearities
	(5.1)	(5.2)	(5.3)	(5.4)	(5.5)	(5.6)
Epidemics (incidence)	1.658***			0.700**
	(0.341)			(0.306)
Epidemics (incidence) squared				−0.009
				(0.008)
Epidemics (affected)		0.004***			0.003***
		(0.001)			(0.001)
Epidemics (affected) squared					−0.0000002***
					(0.0000006)
Epidemics (deaths)			0.198***			0.113***
			(0.047)			(0.029)
Epidemics (deaths) squared						−0.0002***
						(0.00005)
GDP per capita	1.713	0.757	1.478	−0.240	−0.747	−0.817
	(1.434)	(1.004)	(1.394)	(1.017)	(0.960)	(1.058)
Government size	0.677**	−0.758***	−1.076***	0.192	0.008	−0.157
	(0.299)	(0.222)	(0.263)	(0.172)	(0.199)	(0.194)
Political freedom	0.606*	−0.622*	0.247	0.933***	0.617*	0.834**
	(0.336)	(0.365)	(0.303)	(0.326)	(0.355)	(0.347)
Regulatory quality	−15.219***	2.074	−4.038	−13.075***	−8.946**	−9.807**
	(4.262)	(4.453)	(2.963)	(3.824)	(4.120)	(4.165)
Economic freedom	1.096***	−0.027	0.280	0.894***	0.638**	0.671**
	(0.282)	(0.323)	(0.181)	(0.242)	(0.260)	(0.257)
Education	0.030	0.036	0.059	−0.067*	−0.062*	−0.050
	(0.030)	(0.027)	(0.037)	(0.034)	(0.035)	(0.037)
Weak identification test	14.32	6.250	3.329
Under identification test	16.69***	13.21***	7.924**
	[0.001]	[0.004]	[0.048]
Overidentification test	2.126	2.418	2.377
	[0.345]	[0.299]	[0.305]
Endogeneity test	13.28***	11.83***	13.25***
	[0.0003]	[0.001]	[0.000]
Observations	95	95	95	100	100	100
R-squared				0.530	0.563	0.565

See Table 1 for variable details. Models 5.1–5.3 are estimated using two-step efficient GMM with the spatial lag of Epidemics (incidences), Epidemics (affected), and Epidemics (deaths) (all averaged of the previous ten years, 1990–1999), as instruments; Models 5.4–5.6 are estimated using OLS. Robust standard errors are in parentheses, and probability values are in brackets

Asterisks denote the following significance levels: ***p<0.01, **p<0.05, and *p<0.1