| Annex 1: Dynamic panel estimation of expenditure composition and its impact on per capita GSDP growth of NSC states |
| | Model 1 | Model 2 | Model 3 | Model 4 |
| GFD/GSDP | -1.05* | -1.36* | -1.49* | -1.19* |
| | (0.00) | (0.00) | (0.00) | (0.00) |
| Debt/GSDP lagged | 0.67*** | 0.79** | 1.01* | 1.31* |
| | (0.06) | (0.02) | (0.00) | (0.00) |
| (Debt/GSDP)2 lagged | -0.01*** | -0.01** | -0.01** | -0.01** |
| | (0.08) | (0.02) | (0.03) | (0.01) |
| Capital Outlay / Total Expenditure | 0.48* | | | |
| | (0.00) | | | |
| Revenue Expenditure / Total Expenditure | | -0.54* | | |
| | | (0.00) | | |
| Development Expenditure / Total Expenditure | | | 0.55* | |
| | | | (0.00) | |
| Non-development Expenditure / Total Expenditure | | | | -0.66* |
| | | | | (0.00) |
| Constant | 0.13 | 51.99* | -37.65* | 13.89** |
| | (0.98) | (0.00) | (0.00) | (0.04) |
| Number of observations | 187 | 187 | 187 | 187 |
| Arellano-Bond test@ | | | | |
| AR(1) | -3.04 | -2.42 | -2.51 | -2.74 |
| | (0.00) | (0.02) | (0.01) | (0.01) |
| AR(2) | -1.42 | -1.54 | -1.71 | -1.32 |
| | (0.15) | (0.12) | (0.09) | (0.19) |
*,**, and *** indicate significance at 1%, 5% and 10% levels, respectively; Figures in parenthesis show the p-value.
@:Arellano-Bond test (1991) for AR(1) and AR(2) in first difference with p-value in parenthesis.
The overall validity of instruments in each of the equations are checked using the Sargan test of over-identifying restrictions. |