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Journal of Economic Structures

The Official Journal of the Pan-Pacific Association of Input-Output Studies (PAPAIOS)

Table 3 Economic governance, capital flight and industrialisation

From: Governance, capital flight and industrialisation in Africa

 

Dependent variable: industrialisation

Regulation quality

Government effectiveness

Economic governance

Industrialisation (− 1)

0.838***

0.929***

0.629***

0.918***

0.845***

0.908***

(0.000)

(0.000)

(0.000)

(0.000)

(0.000)

(0.000)

Constant

2.943

2.024

38.618***

8.083***

1.812

5.121**

(0.482)

(0.473)

(0.000)

(0.008)

(0.642)

(0.018)

Regulation quality (RG)

0.841

0.135

–

–

–

–

(0.746)

(0.946)

    

Government effectiveness (GE)

–

–

38.184***

8.231***

–

–

  

(0.000)

(0.006)

  

Economic governance (Ecogov)

–

–

–

–

2.904*

2.516*

    

(0.071)

(0.056)

Capital flight (− 1)(CapFlight)

− 0.258

− 0.259

− 3.466***

− 0.822***

− 0.181

− 0.500**

(0.480)

(0.307)

(0.000)

(0.004)

(0.602)

(0.027)

RG × CapFlight

− 0.120

− 0.127

–

–

–

–

(0.637)

(0.511)

    

GE × CapFlight

–

–

− 3.824***

− 0.994***

–

–

  

(0.000)

(0.001)

  

Ecogov × CapFlight

–

–

–

–

− 0.301*

− 0.325**

    

(0.073)

(0.016)

Trade

0.023**

0.027***

0.014

0.019***

0.032***

0.032***

(0.014)

(0.000)

(0.217)

(0.001)

(0.007)

(0.000)

Domestic investment

− 0.023

− 0.002

− 0.033*

− 0.009

− 0.023

− 0.019**

(0.147)

(0.772)

(0.091)

(0.177)

(0.273)

(0.016)

Population

–

0.0009

–

− 0.005**

–

0.002

 

(0.848)

 

(0.045)

 

(0.517)

Bank efficiency

–

− 0.038***

–

− 0.032***

–

− 0.033***

 

(0.000)

 

(0.000)

 

(0.000)

Private credit

–

0.085***

–

0.074***

–

0.087***

 

(0.000)

 

(0.000)

 

(0.000)

Net effects of capital flight

na

na

− 0.884

− 0.151

na

− 0. 531

AR(1)

(0.267)

(0.082)

(0.270)

(0.078)

(0.261)

(0.078)

AR(2)

(0.293)

(0.348)

(0.304)

(0.361)

(0.289)

(0.322)

Sargan OIR

(0.000)

(0.000)

(0.000)

(0.000)

(0.000)

(0.000)

Hansen OIR

(0.510)

(0.795)

(0.321)

(0.737)

(0.656)

(0.769)

DHT for instruments

 (a) Instruments in levels

  H excluding group

(0.498)

(0.303)

(0.316)

(0.813)

(0.605)

(0.808)

  Dif (null, H = exogenous)

(0.457)

(0.921)

(0.353)

(0.544)

(0.567)

(0.592)

 (b) IV (years, eq(diff))

  H excluding group

(0.335)

(0.808)

(0.539)

(0.557)

(0.719)

(0.669)

  Dif (null, H = exogenous)

(0.890)

(0.411)

(0.103)

(1.000)

(0.317)

(0.811)

Fisher

417.99***

481.48***

99.04***

302.18***

145.96***

1338.42***

Instruments

26

38

26

38

26

38

Countries

35

35

35

35

35

35

Observations

323

307

322

306

322

306

  1. *,**,***: significance levels of 10%, 5% and 1% respectively. DHT difference in Hansen Test for Exogeneity of Instruments’ Subsets, Dif difference, OIR over-identifying restrictions test. The italicised values have a twofold meaning: (1) The significance of estimated coefficients and the Fisher statistics. (2) The failure to reject the null hypotheses of: (a) no autocorrelation in the AR(1) and AR(2) tests and; (b) the validity of the instruments in the Sargan and Hansen OIR tests. The mean values of government effectiveness, regulation quality and economic governance are respectively − 0.675, − 0.663 and 0.098. It is important to note that whereas the sample consists of 36 African countries, 35 countries may appear in the regression output because of issues in degrees of freedom associated with some variables used in the conditioning information set. na not applicable because at least one estimated coefficient needed for the computation of net effects is not significant
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