Table 2 Impact of institutional quality on capital flows (system GMM estimates)

L. capital flows

0.246***

0.248***

0.230***

0.209***

0.239***

0.241***

0.225***

0.234***

0.271***

0.252***

(0.0618)

(0.0550)

(0.0446)

(0.0447)

(0.0549)

(0.0654)

(0.0578)

(0.0615)

(0.0551)

(0.0531)

Interest rate

0.466*

0.899**

0.615**

0.823***

1.257**

0.355*

0.391**

0.127

1.396**

1.209**

(0.242)

(0.400)

(0.268)

(0.266)

(0.521)

(0.170)

(0.170)

(0.224)

(0.590)

(0.464)

Exchange rate

1.675***

3.222***

4.163***

2.653***

3.376***

5.091

2.247***

2.321***

4.411***

4.091***

(0.553)

(0.786)

(1.042)

(0.781)

(0.665)

(3.769)

(0.583)

(0.491)

(1.274)

(1.070)

Urbanisation

− 0.0331**

− 0.0209*

− 0.00968

0.00175

− 0.0371**

0.0115

− 0.0121

− 0.00586

− 0.00858

− 0.00742

(0.0142)

(0.0101)

(0.00703)

(0.00823)

(0.0149)

(0.0332)

(0.0134)

(0.0123)

(0.00600)

(0.00597)

GDP

− 0.0698

0.179

0.568**

0.376

0.0354

− 0.112

− 0.0772

− 0.0379

0.575*

0.318*

(0.141)

(0.111)

(0.242)

(0.246)

(0.116)

(0.133)

(0.107)

(0.136)

(0.300)

(0.177)

Property rights

0.0413

(0.280)

Government integrity

1.271

(1.112)

Tax burden

0.223***

(0.0590)

Government spending

0.0663***

(0.0122)

Business freedom

4.384

(2.742)

Monetary freedom

0.0120***

(0.00276)

Trade freedom

0.0408**

(0.0160)

Investment freedom

0.0161***

(0.00412)

Financial freedom

0.00398

(0.0114)

Economic freedom index

0.0756**

(0.0337)

Constant

− 465.7***

− 9.409

− 25.34***

− 11.27***

− 22.20*

− 236.1

− 3.841***

− 314.7**

− 11.17**

− 12.57**

(109.4)

(5.498)

(7.703)

(3.832)

(12.18)

(233.8)

(1.135)

(134.4)

(5.160)

(5.247)

Observations

298

298

298

298

298

298

298

298

298

298

GMM instrument lag

1

1

1

1

1

1

1

1

1

1

Country and time dummies

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Yes

F Stat

[P value]

24.57

(0.000)

2517.12

(0.000)

41.58

(0.000)

363.79

(0.000)

626.41

(0.000)

134.14

(0.000)

63.07

(0.000)

337.99

(0.000)

751.91

(0.000)

343.68

(0.000)

AR(1)

− 3.64

− 3.69

− 3.49

− 3.54

− 3.46

− 3.54

− 3.54

− 3.64

− 4.08

− 3.86

[P value]

(0.000)

(0.000)

(0.000)

(0.000)

(0.000)

(0.000)

(0.000)

(0.000)

(0.000)

(0.000)

AR(2)

0.76

0.81

0.44

0.54

0.61

0.69

0.73

0.70

0.81

0.78

[P value]

(0.452)

(0.418)

(0.658)

(0.594)

(0.545)

(0.491)

(0.468)

(0.486)

(0.416)

(0.435)

Hansen test

[P value]

12.36

(0.577)

14.99

(0.379)

12.10

(0.598)

15.13

(0.369)

12.74

(0.547)

13.94

(0.454)

17.04

(0.468)

13.35

(0.499)

13.74

(0.469)

13.32

(0.402)

Sargan test

16.02

19.00

18.79

17.52

19.13

16.04

18.69

15.68

19.03

18.86

[P value]

(0.312)

(0.165)

(0.173)

(0.229)

(0.160)

(0.311)

(0.177)

(0.333)

(0.164)

(0.171)

Number of groups

20

20

20

20

20

20

20

20

20

20