RBA Annual Conference – 2007 Finance and Welfare States in Globalising Markets

Table 1: Cross-country Relationship between Openness, Credit, and Government Consumption Share of GDP – Worldwide Sample

	(1) Government	(2) Government	(3) Government	(4) Credit	(5) Government	(6) Government	(7) Government	(8) Government	(9) Government(a)
Openness	0.1882	0.2384	0.2761	0.3703	0.2779	0.2097	0.2741	0.3877	0.3963
	3.19	3.91	4.35	2.91	4.46	2.58	4.28	3.08	3.38
Population		0.0002	0.0004	0.0016	0.0004	0.0004	0.0004	0.0003	0.0009
		1.28	1.11	2.78	1.12	0.94	2.10	1.88	2.04
GDPpc		−0.0160	−0.0106	0.0922	−0.0101	−0.0107	−0.0098	−0.0113	0.0187
		−4.96	−2.99	14.41	−1.90	−2.01	−2.35	−2.63	0.91
Credit					−0.0048	0.2180			−0.3173
					−0.10	0.92			−1.41
Openness*Credit						−0.0531
						−0.95
CredInfo							−0.0268	0.1397
							−1.67	1.17
Openness*CredInfo								−0.0385
								−1.42
No	184	184	135	135	135	135	152	152	127
R2	0.0616	0.1462	0.1481	0.5652	0.1482	0.1531	0.1690	0.1793
Notes: Observations are averages over periods between 1985 and 2003 where data are available for each country; before computing the average, occasionally missing data are interpolated (the results are virtually identical when only available data are averaged). All regressions include a constant term. Robust t-statistics are reported below the coefficients. Sample: all countries, except those where openness exceeds 200 per cent (Hong Kong and Singapore) and countries where data are missing. (a) Credit is instrumented with CredInfo.