_Table 10: Estimates by income level category._

|Dependent Variable|||∆GDPpcrt|||
|---|---|---|---|---|---|
|Regional Taxonomy|High-Income|Transition|Less Developed|Low-|Income|
||(1)|(2)|(3)|(4)|(5)|
|lGDP|0265****|0222****|0144****|0206****|0206****|
|og(pcrt−1)|-.|-.|-.|-.|-.|
||(0.010)|(0.016)|(0.016)|(0.011)|(0.011)|
|Population Changert||||||
|<br>< 0|Ref.|Ref.|Ref.|Ref.|Ref.|
|≥0|0.000|-0.005*|-0.003|0.012***|0.012**|
||(0.001)|(0.003)|(0.003)|(0.005)|(0.005)|
|log(Employment Densityrt−1)|0.039**|0.073***|0.040*|0.058****|0.061****|
||(0.016)|(0.027)|(0.023)|(0.016)|(0.016)|
|log(Share GVA Agriculturert−1)|0.152|0.406**|0.212*|-0.091|-0.105|
||(0.132)|(0.177)|(0.122)|(0.071)|(0.072)|
|log(Share GVA Industryrt−1)|<br>0.047****|<br>0.109****|<br>0.021*|<br>0.016|<br>0.016|
||(0.007)|(0.020)|(0.012)|(0.011)|(0.010)|
|log(Share GVA Constructionrt−1)|0.037****|0.059****|0.039****|0.001|0.001|
||(0.004)|(0.008)|(0.005)|(0.006)|(0.006)|
|log(Share GVA Market Servicesrt−1)|0.110****|0.143***|0.066**|0.001|0.001|
||(0.011)|(0.047)|(0.030)|(0.013)|(0.013)|
|log(Share GVA NonMarket Servicesrt−1)|<br>-0.070****|<br>0.002|<br>-0.027|<br>0.007|<br>0.008|
||(0.009)|(0.030)|(0.021)|(0.013)|(0.013)|
|log(Patentsrt−1)|0.002*|-0.001|0.005***|0.004**|0.004**|
||(0.001)|(0.001)|(0.002)|(0.002)|(0.002)|
|log(Inward FDIrt−1)|0.002|0.003|-0.001|0.011****|...|
||(0.001)|(0.003)|(0.005)|(0.003)||
|Max Inward FDIrt−1||||||
|None|...|...|...|...|Ref.|
|Headuarter|||||0004|
|q|...|...|...|...|.|
||||||(0.010)|
|Innovation|...|...|...|...|<br>-0.011<br>|
||||||(0.011)|
|Production|...|...|...|...|<br>0.007**|
||||||(0.003)|
|Logistics, Distribution, Transportation|...|...|...|...|0.014*|
||||||(0.008)|
|Marketing and Sales|...|...|...|...|<br>0.005<br>|
||||||(0.004)|
|Region FE|Yes|Yes|Yes|Yes|Yes|
|Year FE|Yes|Yes|Yes|Yes|Yes|
|No. Observations|10,500|2,716|2,310|2,968|2,968|
|No. Regions|750|194|165|212|212|
|<br>R<sup>2</sup>|0.39|0.37|0.36|0.48|0.48|
|Adjusted R<sup>2</sup>|0.34|0.31|0.31|0.44|0.43|
|<br>Model F Statistics[p-value]<br>|177.10[0.000]<br>|42.93[0.000]<br>|47.22[0.000]<br>|83.12[0.000]<br>|71.49[0.000]<br>|
|Notes: *G< 0.1; **G< 0.05; ***G< 0.01;<br>those with an average yearly GDP per capita<br>regions are those with an average yearly GDP<br>lower than the 90% of the sample average. Les<br>equal to or greater than the 50% of the sample<br>average yearly GDP per capita over the period<br>FDI are defined per 100,000 inhabitants. All<br>change between timesNandN−1, and the cate<br>inward FDI that interested a region, for which|****G< 0.001.<br>over the period 20<br>per capita over the<br>s developed region<br>average, but lower<br>2003-2017 lower th<br>variables are defin<br>gorical variable in<br>the category used a|Robust standard e<br>03-2017 equal to<br>period 2003-2017<br>s are those with an<br>than the 75% of t<br>an the 50% of the s<br>ed in logarithm te<br>cluded in specifica<br>s reference is no i|rrors are reported in p<br>or greater than the 90<br>equal to or greater tha<br>average yearly GDP<br>he sample average. L<br>ample average. The v<br>rms, except for the d<br>tion (5) that captures<br>nward FDI received.|arentheses. High-<br>% of the sample<br>n the 75% of the s<br>per capita over th<br>ow-income region<br>ariables capturing<br>ummy variable ca<br>the most relevant|income regions are<br>average. Transition<br>ample average, but<br>e period 2003-2017<br>s are those with an<br>patents and inward<br>pturing population<br>business activity of|

**Looking more closely at the role of FDI in low-income regions, we see growth is generated most by production, logistics, distribution and transportation activities.** Specification (5) uses the categorical variable for inward FDI in the sub-sample of ‘low-income’ regions. The results indicate that ‘low-income’ regions exhibited a ‘growth premium’ when they attract inward FDI in production activities and logistics, distribution and transportation. These are usually not high value

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