# **Table 7. Business regulations and growth**

||||||**panel A**|||||||||**panel B**|||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
||(1)|(2)|(3)|(4)|(5)|(6)|(7)|(8)|(9)|(10)|(11)|(12)|(13)|(14)|(15)|(16)|(17)|(18)|
|VARIABLES|growth|growth|growth|growth|growth|growth|growth|growth|growth|growth|growth|growth|growth|growth|growth|growth|growth|growth|
|GDP per capita|||||||||||||||||||
|<br>(log)|-5.017***|-5.024***|-3.870**|-5.160**|-5.087**|-5.157**|-6.566***|-6.416***|-8.565***|-4.922***|-4.924***|-3.794**|-5.093***|-5.033**|-5.117***|-6.496***|-6.338***|-8.366***|
||(-3.206)|(-3.212)|(-2.042)|(-2.562)|(-2.504)|(-2.534)|(-3.055)|(-2.813)|(-3.047)|(-3.194)|(-3.196)|(-2.049)|(-2.598)|(-2.553)|(-2.594)|(-3.114)|(-2.875)|(-3.128)|
|FDI||0.000808|0.00110|0.000344|0.000494|0.000365|0.000214|0.000318|0.00243||0.000425|0.000537|-0.000356|-0.000149|-0.000327|-0.000445|-0.000219|0.00148|
|||(0.628)|(1.111)|(0.370)|(0.517)|(0.400)|(0.204)|(0.309)|(1.188)||(0.338)|(0.541)|(-0.358)|(-0.146)|(-0.330)|(-0.379)|(-0.187)|(0.727)|
|Country risk (ICRG)|||0.124*|0.0900|0.0845|0.0868|0.0776|0.0797|0.136|||0.118*|0.0848|0.0774|0.0782|0.0703|0.0719|0.120|
|Government|||(1.886)|(1.324)|(1.292)|(1.367)|(1.190)|(1.219)|(1.628)|||(1.910)|(1.323)|(1.244)|(1.294)|(1.119)|(1.138)|(1.482)|
|<br>consumption||||-0.258***|-0.227***|-0.222***|-0.161**|-0.173**|-0.163*||||-0.255***|-0.223***|-0.218***|-0.160**|-0.172**|-0.163*|
|||||(-3.052)|(-2.696)|(-2.662)|(-2.082)|(-2.173)|(-1.892)||||(-3.080)|(-2.707)|(-2.663)|(-2.057)|(-2.157)|(-1.909)|
|Rents from natural<br>resources|||||0.0341|0.0342|-0.00625|0.00516|-0.0283|||||0.0364|0.0369|-0.00270|0.00825|-0.0286|
|Political freedom|||||(1.189)|(1.182)|(-0.206)|(0.167)|(-0.863)|||||(1.286)|(1.298)|(-0.0898)|(0.267)|(-0.874)|
|<br>and civil rights (FH)||||||0.313|0.357|0.370|-0.00820||||||0.290|0.331|0.350|-0.0640|
|||||||(0.715)|(0.858)|(0.870)|(-0.0200)||||||(0.638)|(0.766)|(0.790)|(-0.145)|
|Trade (X and M)|||||||0.0617***|0.0591***|0.0547***|||||||0.0590***|0.0564***|0.0515***|
||||||||(3.526)|(3.435)|(3.124)|||||||(3.419)|(3.317)|(2.950)|
|Corruption (CPI)||||||||-0.117|-0.375||||||||-0.141|-0.413|
|||||||||(-0.355)|(-0.854)||||||||(-0.437)|(-0.951)|
|Credit to private|||||||||||||||||||
|<br>sector|||||||||-0.0278|||||||||-0.0287|
|L GDP|||||||||(-1.170)|||||||||(-1.181)|
|agged<br>growth|0.448***|0.448***|0.426***|0.365***|0.356***|0.359***|0.330***|0.327***|0.274***|0.445***|0.445***|0.427***|0.371***|0.363***|0.365***|0.337***|0.335***|0.291***|
||(10.84)|(10.84)|(6.830)|(4.857)|(5.060)|(5.047)|(4.800)|(4.780)|(3.140)|(11.09)|(11.10)|(7.124)|(5.145)|(5.427)|(5.436)|(5.109)|(5.129)|(3.498)|
|Delta DTF|-0.0282|-0.0291|0.0492|0.0756|0.0805|0.0817|0.0750|0.0802|0.0813||||||||||
||(-0.872)|(-0.900)|(0.964)|(1.335)|(1.438)|(1.435)|(1.365)|(1.415)|(1.306)||||||||||
|Delta DTF (D2)||||||||||0.250*|0.252*|0.372**|0.390*|0.353*|0.374*|0.353*|0.286|0.363|
|||||||||||(1.672)|(1.678)|(2.002)|(1.932)|(1.710)|(1.802)|(1.723)|(1.400)|(1.388)|
|Delta DTF (D3)||||||||||0.272|0.266|0.397*|0.335|0.303|0.339|0.274|0.239|0.0477|
|||||||||||(1.461)|(1.422)|(1.735)|(1.440)|(1.313)|(1.453)|(1.234)|(1.035)|(0.168)|
|Delta DTF (D4)||||||||||<br>0.297|<br>0.293|<br>0.773**|<br>0.915***|<br>0.929***|<br>0.977***|<br>0.808**|<br>0.799**|<br>0.830**|
|||||||||||(1.335)|(1.316)|(2.316)|(2.599)|(2.620)|(2.696)|(2.373)|(2.326)|(2.058)|
|Constant|45.62***|45.68***|30.23*|48.02***|46.77***|46.22**|53.39***|52.70***|73.99***|<br>44.51***|<br>44.54***|<br>29.49*|<br>47.33***|<br>46.27***|<br>45.96**|<br>53.13***|<br>52.54***|<br>73.45***|
||(3.289)|(3.295)|(1.853)|(2.663)|(2.599)|(2.517)|(2.801)|(2.703)|(3.044)|(3.256)|(3.258)|(1.840)|(2.690)|(2.642)|(2.566)|(2.856)|(2.768)|(3.143)|
|Observations|855|852|633|567|561|557|552|545|428|855|852|633|567|561|557|552|545|428|
|Number of cod2|175|174|130|122|122|121|120|118|115|175|174|130|122|122|121|120|118|115|
|chi2|138.6|138.4|167.3|135.0|163.9|160.4|106.7|113.8|92.57|134.6|134.7|158.5|123.3|154.8|152.4|108.4|112.7|89.27|
|Robust z-statistics in<br>parentheses<br>*** p<0.01, ** p<0.05,|* p<0.1||||||||||||||||||

**Notes:** ***(**)(*) denotes significance at the 1(5)(10) percent level. Standard errors reported in parentheses. This table reports results from Arellano-Bond dynamic panel estimator regressions of growth on the change in the distance to the overall regulatory frontier. The estimations reported include controls for lagged GDP per capita growth, per-capita GDP, trade openness, corruption, credit to the private sector, FDI inflow, economic and political risk as well as civil freedoms. All specifications include time dummies to control for any global changes in the macroeconomic environment. In order to check if the entity of the regulatory change matters for the impact on growth, Panel B reports an alternative set of specifications where the change in the overall distance to the regulatory frontier is replaced by set of dummy variables that divide economies in quartiles based on the magnitude of their yearly regulatory change.

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