Table 3.
Two-Stage Least Squares Estimates
ExportsImports
Explanatory Variables(1)(2)(3)(4)
A. Second stage; dependent variable: $ln(Exportij,t+1)$ and $ln(Importij,t+1)$
$ln(ACFICitCBTjt)$ 0.336*** 0.378*** 0.381*** 0.288***
(0.034) (0.032) (0.068) (0.066)
$ln(GDPit)$ 0.827*** 1.721*** 1.581*** 2.389***
(0.072) (0.066) (0.129) (0.125)
$ln(GDPjt)$ 0.372*** 0.399*** 0.672*** 0.837***
(0.050) (0.048) (0.103) (0.104)
$ln(Distanceij)$ −0.236*** −0.271*** −0.543*** −0.740***
(0.063) (0.060) (0.115) (0.115)
$Borderij$ 3.513*** 3.335*** 3.288*** 3.287***
(0.597) (0.586) (0.829) (0.834)
$Religionij$ 1.991*** 2.838*** 1.582*** 1.463***
(0.233) (0.256) (0.541) (0.467)
$ln(Populationit)$ 0.576*** −0.508*** −0.379** −1.333***
(0.091) (0.084) (0.175) (0.154)
$ln(Populationjt)$ 0.267*** 0.226*** −0.273*** −0.320***
(0.048) (0.049) (0.098) (0.100)
$ln(Areait)$ −0.645*** −0.507*** −0.953*** −0.732***
(0.033) (0.025) (0.062) (0.046)
$ln(Areajt)$ −0.087*** −0.086*** 0.187*** 0.170***
(0.022) (0.021) (0.038) (0.037)
$SFIjt$ −0.033*** −0.026** −0.059** −0.070***
(0.012) (0.012) (0.024) (0.024)
$ln(TCPj,t-1)$ 0.117*** 0.113*** 0.093*** 0.108***
(0.021) (0.020) (0.035) (0.035)
B. First stage; dependent variable: $ln(ACFICitCBTjt)$
$ln(PrivateFirmitCBTjt)$ 1.001*** 1.015*** 0.988*** 0.975***
(0.009) (0.009) (0.010) (0.010)
$ln(GDPit)$ −0.896*** −0.976*** −0.898*** −1.031***
(0.018) (0.020) (0.019) (0.024)
$ln(GDPjt)$ 0.030*** 0.008 0.034** 0.072***
(0.011) (0.011) (0.013) (0.014)
$ln(Distanceij)$ −0.025 0.074*** −0.029 −0.145***
(0.016) (0.016) (0.019) (0.019)
$Borderij$ −0.067 −0.029 −0.093 −0.237*
(0.100) (0.097) (0.103) (0.131)
$Religionij$ −0.115*** −0.173*** −0.003 −0.074
(0.043) (0.038) (0.087) (0.083)
$ln(Populationit)$ 0.518*** 0.592*** 0.603*** 0.746***
(0.027) (0.024) (0.031) (0.028)
$ln(Populationjt)$ −0.002 0.021* −0.006 −0.040***
(0.012) (0.013) (0.015) (0.015)
$ln(Areait)$ 0.162*** 0.135*** 0.138*** 0.097***
(0.010) (0.008) (0.013) (0.010)
$ln(Areajt)$ 0.000 0.007 0.001 −0.002
(0.006) (0.006) (0.007) (0.007)
$SFIjt$ −0.001 −0.008*** −0.002 0.001
(0.003) (0.003) (0.003) (0.003)
$ln(TCPj,t-1)$ 0.008* 0.004 0.013** 0.030***
(0.005) (0.005) (0.005) (0.006)
Fixed effects No Province Country Year No Province Country Year
No. of observations 6,203 6,203 4,870 4,870
Cragg–Donald statistic 25,938 23,083 19,117 14,459
(Critical value) (16.38) (16.38) (16.38) (16.38)
First-stage R-squared 0.957 0.947 0.950 0.932
Second-stage R-squared 0.702 0.786 0.549 0.640
ExportsImports
Explanatory Variables(1)(2)(3)(4)
A. Second stage; dependent variable: $ln(Exportij,t+1)$ and $ln(Importij,t+1)$
$ln(ACFICitCBTjt)$ 0.336*** 0.378*** 0.381*** 0.288***
(0.034) (0.032) (0.068) (0.066)
$ln(GDPit)$ 0.827*** 1.721*** 1.581*** 2.389***
(0.072) (0.066) (0.129) (0.125)
$ln(GDPjt)$ 0.372*** 0.399*** 0.672*** 0.837***
(0.050) (0.048) (0.103) (0.104)
$ln(Distanceij)$ −0.236*** −0.271*** −0.543*** −0.740***
(0.063) (0.060) (0.115) (0.115)
$Borderij$ 3.513*** 3.335*** 3.288*** 3.287***
(0.597) (0.586) (0.829) (0.834)
$Religionij$ 1.991*** 2.838*** 1.582*** 1.463***
(0.233) (0.256) (0.541) (0.467)
$ln(Populationit)$ 0.576*** −0.508*** −0.379** −1.333***
(0.091) (0.084) (0.175) (0.154)
$ln(Populationjt)$ 0.267*** 0.226*** −0.273*** −0.320***
(0.048) (0.049) (0.098) (0.100)
$ln(Areait)$ −0.645*** −0.507*** −0.953*** −0.732***
(0.033) (0.025) (0.062) (0.046)
$ln(Areajt)$ −0.087*** −0.086*** 0.187*** 0.170***
(0.022) (0.021) (0.038) (0.037)
$SFIjt$ −0.033*** −0.026** −0.059** −0.070***
(0.012) (0.012) (0.024) (0.024)
$ln(TCPj,t-1)$ 0.117*** 0.113*** 0.093*** 0.108***
(0.021) (0.020) (0.035) (0.035)
B. First stage; dependent variable: $ln(ACFICitCBTjt)$
$ln(PrivateFirmitCBTjt)$ 1.001*** 1.015*** 0.988*** 0.975***
(0.009) (0.009) (0.010) (0.010)
$ln(GDPit)$ −0.896*** −0.976*** −0.898*** −1.031***
(0.018) (0.020) (0.019) (0.024)
$ln(GDPjt)$ 0.030*** 0.008 0.034** 0.072***
(0.011) (0.011) (0.013) (0.014)
$ln(Distanceij)$ −0.025 0.074*** −0.029 −0.145***
(0.016) (0.016) (0.019) (0.019)
$Borderij$ −0.067 −0.029 −0.093 −0.237*
(0.100) (0.097) (0.103) (0.131)
$Religionij$ −0.115*** −0.173*** −0.003 −0.074
(0.043) (0.038) (0.087) (0.083)
$ln(Populationit)$ 0.518*** 0.592*** 0.603*** 0.746***
(0.027) (0.024) (0.031) (0.028)
$ln(Populationjt)$ −0.002 0.021* −0.006 −0.040***
(0.012) (0.013) (0.015) (0.015)
$ln(Areait)$ 0.162*** 0.135*** 0.138*** 0.097***
(0.010) (0.008) (0.013) (0.010)
$ln(Areajt)$ 0.000 0.007 0.001 −0.002
(0.006) (0.006) (0.007) (0.007)
$SFIjt$ −0.001 −0.008*** −0.002 0.001
(0.003) (0.003) (0.003) (0.003)
$ln(TCPj,t-1)$ 0.008* 0.004 0.013** 0.030***
(0.005) (0.005) (0.005) (0.006)
Fixed effects No Province Country Year No Province Country Year
No. of observations 6,203 6,203 4,870 4,870
Cragg–Donald statistic 25,938 23,083 19,117 14,459
(Critical value) (16.38) (16.38) (16.38) (16.38)
First-stage R-squared 0.957 0.947 0.950 0.932
Second-stage R-squared 0.702 0.786 0.549 0.640

Notes: Standard errors clustered at the level of province–country pair are included in parentheses. Significance level = *p < 0.1, **p < 0.05, ***p < 0.01. The critical value of the Cragg–Donald statistic in each parentheses corresponds to the 10% maximal IV size.

Source: Authors’ calculations.

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