| . | (1) . | (2) . |
|---|---|---|
| Share of industrial output in GDPt−1 | 0.795* | 0.795* |
| (76.56) | (76.55) | |
| Underval | 0.013* | 0.021* |
| (5.79) | (3.78) | |
| Fin devt | −0.002*** | −0.002*** |
| (−1.77) | (−1.92) | |
| Underval × fin devt | −0.003* | |
| (−3.61) | ||
| Dependency ratiot−1 | −0.000* | −0.000* |
| (−2.92) | (−3.11) | |
| Trade opennesst−1 | 0.000 | 0.000 |
| (0.27) | (0.31) | |
| Govt. expenditure sharet−1 | −0.014*** | −0.017** |
| (−1.78) | (−2.08) | |
| Investment sharet−1 | 0.021** | 0.020** |
| (2.53) | (2.41) | |
| Fixed effects | ||
| Economy fixed effect | Yes | Yes |
| Year fixed effect | Yes | Yes |
| Observations | 3,338 | 3,338 |
| R2 | 0.681 | 0.682 |
| . | (1) . | (2) . |
|---|---|---|
| Share of industrial output in GDPt−1 | 0.795* | 0.795* |
| (76.56) | (76.55) | |
| Underval | 0.013* | 0.021* |
| (5.79) | (3.78) | |
| Fin devt | −0.002*** | −0.002*** |
| (−1.77) | (−1.92) | |
| Underval × fin devt | −0.003* | |
| (−3.61) | ||
| Dependency ratiot−1 | −0.000* | −0.000* |
| (−2.92) | (−3.11) | |
| Trade opennesst−1 | 0.000 | 0.000 |
| (0.27) | (0.31) | |
| Govt. expenditure sharet−1 | −0.014*** | −0.017** |
| (−1.78) | (−2.08) | |
| Investment sharet−1 | 0.021** | 0.020** |
| (2.53) | (2.41) | |
| Fixed effects | ||
| Economy fixed effect | Yes | Yes |
| Year fixed effect | Yes | Yes |
| Observations | 3,338 | 3,338 |
| R2 | 0.681 | 0.682 |
GDP = gross domestic product.
Notes:
1. Observations are annual data for the period 1980–2011.
2. Both undervaluation and private credit/GDP are in logarithmic form.
3. t-statistics in parenthesis.
4. *** = 10% level of statistical significance, ** = 5% level of statistical significance, * = 1% level of statistical significance.
Sources: Authors’ calculations based on World Bank. “World Development Indicators.” http://databank.worldbank.org/data/reports.aspx?source=world-development-indicators; Penn World Tables 8.0. http://www.rug.nl/research/ggdc/data/pwt/