Sensitivity Analyses on the Effect of Legal Rules Variation on Economic and Financial Performance
This chapter presents several robustness checks so as to determine whether the lack of a clear-cut impact of legal rules and regulatory indicators on economic and financial performance holds for alternative legal indicators, some of which extend over lengthier periods than the Doing Business indicators. Other sensitivity analyses entail the use of alternative estimators such as the difference GMM estimator of Arellano and Bond (Rev Econ Stud 58(2):277–297) and the system GMM estimator of Arellano and Bover (J Econ 68(1):29–51). The lack of effect of legal rules and regulatory indicators on financial and economic performance may indicate the existence of a gap between intended legal and regulatory reforms and the reality on the ground.
KeywordsRobustness analysis Legal change Financial and economic performance GMM panel estimation
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