Table 5.

. | (1) . | (2) . |
---|---|---|

Share of industrial output in GDP_{t−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 ratio_{t−1} | −0.000^{*} | −0.000^{*} |

(−2.92) | (−3.11) | |

Trade openness_{t−1} | 0.000 | 0.000 |

(0.27) | (0.31) | |

Govt. expenditure share_{t−1} | −0.014^{***} | −0.017^{**} |

(−1.78) | (−2.08) | |

Investment share_{t−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 |

R^{2} | 0.681 | 0.682 |

. | (1) . | (2) . |
---|---|---|

Share of industrial output in GDP_{t−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 ratio_{t−1} | −0.000^{*} | −0.000^{*} |

(−2.92) | (−3.11) | |

Trade openness_{t−1} | 0.000 | 0.000 |

(0.27) | (0.31) | |

Govt. expenditure share_{t−1} | −0.014^{***} | −0.017^{**} |

(−1.78) | (−2.08) | |

Investment share_{t−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 |

R^{2} | 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/

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