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Girma, Abebe Gule: The Role of Financial Development in Post-War Economic Growth
Table 5: Financial development and economic growth, multiplicative dummy
variable regression analysis
Period Whole sample Pre-war period War period Post war period
Variables Column1 Column 2 Column 3 Column 4 Column5 Column6 Column7 Column8
_constant 3.6419* -14.4779 2.8025 -11.3623* 1.7344 -11.6271 4.5324** -17.9308
(0.099) (0.506) (0.234) (0.604) (0.427) (0.585) (0.039) (0.408)
FD: 2.1200** 1.7532** 1.8918** 1.5418 * 2.0994** 2.0108** 1.3474 1.2147
(0.025) (0.051) (0.052) (0.092) (0.022) (0.023) (0.163) (0.187)
Off exc 0.1960** 0.1022 0 .2232*** 0.1186 0.1648** 0 .0612 0 .0990 0.0844
(0.017) (0.209) (0.010) (0.151) (0.039) (0.447) (0.258) (0.595)
Ms. -2.9045* -2.9554* -2.4708 -2.3508 -1.5628 -1.9496 -3.1032* -3.3095
(0.110) (0.087) (0.185) (0.191) (0.382) (0.255) (0.083) (0.055) *
LIR -.9910 -1.6032** -.7636 -1.3280* -0.4604 -1.1169 -1.2220* -1.7444**
(0.165) (0.040) (0.307) (0.103) (0.512) (0.151) (0.084) (0.025)
GNEXP - 14.2874 - 12.0355 - 12.1024 - 16.6962*
(0.165) (0.250) (0.230) (0.104)
Trade - -4.3707*** - -4.8248*** - -5.4335*** - -4.3195***
(0.006) (0.003) (0.001) (0.007)
FDI - 0.8485*** - 0.8745*** - 0.7313*** - 0.7213***
(0.000) (0.000) (0.000) (0.000)
Aid - -2.3178** - -1.6890 - -1.2567 - -2.6756
(0.035) (0.165) (0.261) (0.015)
FD*Pre- - - 0.5058 0.6224 - - - -
war dummy (0.315) (0.236)
FD*war - - -1.8807 -1.5573*** - -
dummy (0.000) *** (0.001)
FD*Post- - - - - - - 1.3802*** 1.0876**
war dummy (0.004) (0.027)
Observation 224 224 224 224 224 224 224 224
R-squared 0.0534 0.2197 0.0577 0.2248 0.1168 0.2577 0.0880 0.2373
Source: Authors computation using STATA ,2023
Note: The dependent variable is the RGDP: Real GDP per capita. Figures in brackets imply t statistics. (***), (**), (*) reveal the
1%, 5%, and 10% level of significance, respectively.
RGDP; Real gross domestic annual growth, FD: financial development, Ms: annual money supply growth, LIR: Lending interest
rate, GNEXP: Gross national expenditure, Trade: Trade openness, FDI: foreign direct investment, and Aid.
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