Compliance with estimated threshold SB ≥ −10.92% of GDP

Non-compliance with estimated threshold SB < −10.92% of GDP

Variables

Estimator within

Estimator GMM in system

Estimator within

Estimator GMM in system

DDB_i,t

4.23***

(0.76)

11.5***

(6.08)

0.65

(0.76)

99.19

(89.43)

IC_ij,t

28.34***

(5.79)

14.12

(40.54)

26.88**

(6.57)

−14.88

(30.07)

CF_ij,t-1

12.89*

(5.67)

−2.67

(25.98)

17.45**

(9.34)

−21.71

(13.61)

S_ij,t-1

0.01

(0.06)

0.08

(0.05)

Observations

285

285

285

283

Country peers

16

16

16

17

R² (within)

0.3468

0.2965

Estimation using the instrumental variables method

Exogenous variables

IC_ij,t

IC_ij,t

ξ_ijt

16.34***

(0.87)

16.33***

(0.65)

DDB_i,t

−0.0007

(0.004)

0.005***

(0.002)

CF_ij,t-1

−0.03

(0.01)

−0.03

(0.01)

Generalized Method of Moments (GMM)

AR (2)

0.08

[0.77]

−074

[0.301]

Hansen Test

(exogenous instruments)

21

[0.13]

9.02

[0.12]

Number of instruments

34

18

F-stat

26.32

33.67