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Institutional Determinants Of Shadow Economy In The Former Soviet Union Countries

Table 4: Two-Stage least squares (2SLS) Estimations Results

DepVar: Shadow Economy 2SLS (IV)
Eq. (11) Eq. (12) Eq. (13) Eq. (14) Eq. (15)
Government Intervention 0.069*** 0.142*** 0.116*** 0.096* 0.067*
(0.022) (0.040) (0.030) (0.054) (0.035)
Business Freedom -0.063*** -0.032 -0.049* -0.034 -0.037
(0.018) (0.032) (0.025) (0.110) (0.033)
Trade Freedom -0.046** -0.027 -0.005 -0.051 0.008
(0.021) (0.029) (0.023) (0.065) (0.041)
Fiscal Freedom -0.211*** - - - -
(0.071)
Control of Corruption - -12.41* - - -
(6.819)
Government Effectiveness - - -6.736** - -
(3.131)
Regulatory Quality - - - -13.75 -
(33.91)
Rule of Law - - - - -14.07*
(8.347)
Log(GDP per capita) -8.961*** -7.517*** -7.299*** -3.485 -6.560***
(0.759) (1.286) (1.186) (13.15) (1.788)
Unemployment 0.254*** 0.231** 0.245*** 0.290* 0.0483
(0.062) (0.091) (0.089) (0.156) (0.147)
Economic Openness -0.046*** -0.036*** -0.053*** -0.046 -0.0762***
(0.007) (0.010) (0.011) (0.032) (0.0243)
Log(Gross capital formation) -1.915*** -1.120*** -1.045*** -0.910 -1.405**
(0.458) (0.362) (0.301) (0.854) (0.547)
Constant 140.5*** 110.0*** 115.8*** 77.97 112.2***
(6.876) (11.65) (8.772) (119.5) (11.80)
Country Fixed Effects Yes Yes Yes Yes Yes
Observations 154 133 133 133 133
R-squared 0.955 0.921 0.939 0.855 0.912
Prob > F 0.000 0.000 0.000 0.000 0.000
Anderson canon. corr. LM statistic 13.714** 5.662* 8.504** 0.362 2.936
Sargan statistic 0.053 0.032 0.424 1.718 0.410
Kleibergen-Paap rk LM statistic 11.624** 5.295* 10.200*** 0.416 3.061
Hansen J statistic 0.038 0.035 0.279 1.712 0.217
Note: Standard errors in parentheses. Significance levels *** p<0.01, ** p<0.05, * p<0.1. The parameter estimates of beta are reported.
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