Variables

Good institutional environment

Poor institutional environment

Two-step

D-GMM

One-step

D-GMM

Two-step

D-GMM

One-step

D-GMM

Real GDP per capita (−1)

−0.800***

(0.076)

−0.798***

(0.089)

−0.716***

(0.103)

−0.658***

(0.151)

Public investment

1.020**

(0.412)

1.524**

(0.715)

−2.265***

(0.835)

−2.589***

(0.864)

Private investment

0.466

(0.194)

0.767

(0.228)

0.601

(0.159)

0.552

(0.216)

Recurrent expenditure

−6.655***

(1.102)

−8.968***

(2.155)

−0.754

(0.843)

−0.048

(1.023)

Labor force

7.577***

(0.964)

8.161***

(1.547)

1.873***

(0.378)

1.795***

(0.473)

Consumer price index

−0.538***

(0.114)

−0.896***

(0.282)

−0.439***

(0.106)

−0.324**

(0.154)

Infrastructure

−0.011

(0.011)

−0.003

(0.023)

0.052

(0.028)

0.017

(0.034)

Trade openness

0.011

(0.013)

−0.0008

(0.016)

0.141

(0.075)

0.163

(0.084)

Instrument

23

20

14

14

Province/Observation

48/253

48/253

41/163

41/163

Sargan test

0.104

0.344

0.130

0.130

Hansen test

0.178

NA

0.248

NA

AR (2) test

0.982

0.779

0.820

0.755