Independent variables

Revenue decentralization

Expenditure decentralization

Average decentralization

D-GMM

FE-2SLS

D-GMM

FE-2SLS

D-GMM

FE-2SLS

GDP per capita (−1)

0.395***

(0.185)

0.713***

(0.027)

0.040***

(0.088)

0.737***

(0.026)

0.093***

(0.183)

0.710***

(0.027)

Fiscal decentralization

44.069***

(11.028)

7.604***

(2.261)

114.25***

(33.919)

4.312

(5.220)

138.85**

(54.52)

11.994***

(3.715)

FDI

0.074*

(0. 041)

0.014***

(0.004)

0.097*

(0.055)

0.012**

(0.005)

0.143**

(0.057)

0.016***

(0.004)

Fiscal decen. * FDI

−0.040***

(0.010)

−0.006***

(0.002)

−0.115***

(0.033)

−0.005

(0.004)

−0.133**

(0.051)

−0.009***

(0.003)

Govern. investment

−6.602***

(2.221)

−0.565***

(0.200)

−7.490***

(2.410)

−0.530**

(0.208)

−8.582***

(2.868)

−0.617***

(0.201)

Labor force

1.460**

(0.643)

0.647***

(0.185)

8.057***

(2.530)

0.718***

(0.187)

8.745***

(3.208)

0.621***

(0.186)

Trade openness

−0.223

(0.136)

−0.0004

(0.005)

−0.142

(0.091)

−0.001

(0.005)

−0.085

(0.107)

−0.0003

(0.005)

Consumer price index

−0.086

(0.178)

−0.125

(0.069)

0.146

(0.355)

−0.146

(0.071)

−0.034

(0.190)

−0.111

(0.070)

Infrastructure

0.009

(0.026)

0.016**

(0.006)

−0.050

(0.045)

0.011*

(0.006)

−0.038

(0.031)

0.015**

(0.006)

Private investment

−0.959

(0.663)

−0.271***

(0.072)

0.083

(1.465)

−0.283***

(0.073)

−1.007

(0.743)

−0.277***

(0.072)

Instrument

18

--

21

--

16

--

Province/observation

52/312

52/468

52/364

52/468

52/364

52/468

Sargan test (p-value)

0.315

0.1530

0.830

0.1447

0.610

0.1583

Hansen test (p-value)

0.152

--

0.470

--

0.537

--

AR (2) test (p-value)

0.277

--

0.415

--

0.400

--