Table 2.
Local capital spending and industrial development: main results
| Variables | Dependent variable: manufacturing | |||||
|---|---|---|---|---|---|---|
| (1) | (2) | (3) | (4) | (5) | (6) | |
| MAN(t−1) | 0.959*** (0.028) | 0.962*** (0.027) | 0.959*** (0.026) | 0.958*** (0.026) | 0.959*** (0.023) | 0.961*** (0.023) |
| LCAP | 0.082* (0.043) | 0.082** (0.032) | 0.083** (0.034) | 0.085** (0.036) | 0.080*** (0.028) | 0.078*** (0.030) |
| GRDPPC | 0.665 (0.822) | 0.706 (0.799) | 0.727 (0.821) | 0.443 (0.660) | 0.458 (0.720) | |
| GRDPPC2 | − 0.143 (0.134) | − 0.153 (0.132) | − 0.156 (0.136) | − 0.132 (0.112) | − 0.116 (0.119) | |
| TRADE(t−1) | 0.001 (0.001) | 0.001 (0.001) | 0.000 (0.001) | 0.000 (0.001) | ||
| INFLATION | 0.052** (0.024) | 0.060** (0.026) | 0.057** (0.025) | |||
| FDIIND | 0.110*** (0.034) | |||||
| DDIIND | 0.057** (0.027) | |||||
| CONS | 0.280 (0.364) | − 0.478 (0.820) | − 0.535 (0.807) | − 0.712 (0.849) | − 0.617 (0.714) | − 0.558 (0.762) |
| Province FE | Yes | Yes | Yes | Yes | Yes | Yes |
| Year FE | Yes | Yes | Yes | Yes | Yes | Yes |
| Observations | 544 | 544 | 544 | 544 | 544 | 544 |
| Provinces | 34 | 34 | 34 | 34 | 34 | 34 |
| Instruments | 23 | 25 | 26 | 27 | 28 | 28 |
| AR-1 | 0.020 | 0.019 | 0.018 | 0.019 | 0.020 | 0.018 |
| AR-2 | 0.243 | 0.243 | 0.241 | 0.320 | 0.241 | 0.365 |
| Hansen (p-value) | 0.257 | 0.227 | 0.222 | 0.311 | 0.337 | 0.356 |
Source: author
AR-1 and AR-2 denotes Arellano–Bond test with p-values results are reported. They are the necessary diagnostics for dynamic panel data estimation, i.e., GMM
Hansen J-test calculates overidentifying restrictions that occurs due to increasing number of instruments. P-value is reported
Robust standard error in parentheses, *p < 0.1, **p < 0.05, ***p < 0.01