use "gem 2001-2006 aps data merged with financial globalisation.dta", clear * construction of additional variables gen age_sq = age*age gen male = GENDER == 1 if GENDER<. gen educ_post = GEMEDUC == 1720 if GEMEDUC<. gen educ_secpost = GEMEDUC == 1720 | GEMEDUC == 1316 if GEMEDUC<. gen omestb_dum = ESTBBUSO gen busang_dum = busang gen knowent_dum = KNOWENT gen sumontot_usd = sumontot / exr label variable sumontot_usd "sumontot/exr for non-zero finance" replace sumontot_usd=. if sumontot>999999997 replace sumontot_usd=. if sumontot==0 gen sumonown_usd = sumonown / exr label variable sumonown_usd "sumonown/exr for non-zero finance" replace sumonown_usd=. if sumonown>999999997 replace sumonown_usd=. if sumonown==0 gen sumonext_usd = sumontot - sumonown label variable sumonext_usd "sumontot - sumonown" gen byte transition=0 replace transition=1 if CTRYALP=="CZ" replace transition=1 if CTRYALP=="HR" replace transition=1 if CTRYALP=="HU" replace transition=1 if CTRYALP=="LV" replace transition=1 if CTRYALP=="PL" replace transition=1 if CTRYALP=="RU" replace transition=1 if CTRYALP=="SI" gen sumonext_shr = sumonext_gdp/sumont_gdp label variable sumonext_shr "sumonext_gdp/sumont_gdp" gen byte sumont_gdp_o = . replace sumont_gdp_o = 0 if sumont_gdp == 0 replace sumont_gdp_o = 1 if sumont_gdp > 0 & sumont_gdp <= .25 replace sumont_gdp_o = 2 if sumont_gdp > .25 & sumont_gdp <= 1 replace sumont_gdp_o = 3 if sumont_gdp > 1 & sumont_gdp <= 3 replace sumont_gdp_o = 4 if sumont_gdp > 3 & sumont_gdp != . gen byte sumone_gdp_o = . replace sumone_gdp_o = 0 if sumonext_gdp == 0 replace sumone_gdp_o = 1 if sumonext_gdp > 0 & sumonext_gdp <= .25 replace sumone_gdp_o = 2 if sumonext_gdp > .25 & sumonext_gdp <= 1 replace sumone_gdp_o = 3 if sumonext_gdp > 1 & sumonext_gdp <= 3 replace sumone_gdp_o = 4 if sumonext_gdp > 3 & sumonext_gdp != . gen byte sumono_gdp_o = . replace sumono_gdp_o = 0 if sumonown_gdp == 0 replace sumono_gdp_o = 1 if sumonown_gdp > 0 & sumonown_gdp <= .25 replace sumono_gdp_o = 2 if sumonown_gdp > .25 & sumonown_gdp <= 1 replace sumono_gdp_o = 3 if sumonown_gdp > 1 & sumonown_gdp <= 3 replace sumono_gdp_o = 4 if sumonown_gdp > 3 & sumonown_gdp != . gen logit_busang = logit(busang_prev) label variable logit_busang "logit(busang_prev)" gen ln_busang = ln(busang_prev) label variable ln_busang "ln(busang_prev)" * corrrected dependent variables gen sumont_gdpc = sumont_gdp replace sumont_gdpc = . if sumont_gdp == 0 label variable sumont_gdpc "sumont_gdp with zeros made missing" gen sumone_gdpc = sumonext_gdp replace sumone_gdpc = . if sumont_gdpc == . gen sumonext_dc = . replace sumonext_dc = 0 if sumone_gdpc != . replace sumonext_dc = 1 if sumone_gdpc > 0 & sumone_gdpc != . gen sumone_shr_c = sumone_gdpc / sumont_gdpc * corrected dependent - ordered volume of finance variables gen sumont_gdpoc = sumont_gdp_o replace sumont_gdpoc = . if sumont_gdp_o==. gen sumone_gdpoc = sumone_gdp_o replace sumone_gdpoc = . if sumont_gdpc == . gen sumono_gdpoc = sumono_gdp_o replace sumono_gdpoc = . if sumont_gdpc == . * labels label variable age "Age" label variable age_sq "Age squared" label variable male "Male" label variable gemwork "In employment" label variable educ_secpost "Post-secondary & higher education" label variable educ_post "Higher education" label variable omestb_dum "Current owner of business" label variable busang_prev "Informal finance prevalence" label variable fin_free "Financial freedom" label variable gov_size "Size of government, WB WDI measure" label variable hfgov_size "Size of government, HF measure" label variable exconst "Property rights, Polity IV" label variable d_gdp "GDP growth" label variable gdp_pc_ppp "GDP per capita ppp" label variable transition "Transition" label variable remit "Remittance inflows/GDP" label variable nrbloan "Loans from non-resident banks/GDP" label variable offdep "Offshore/domestic bank deposits" label variable offdep "Share of offshore bank deposits" label variable sumont_gdpc "Total funds" label variable sumone_gdpc "External funds" label variable sumono_gdpc "Own funds" label variable busang_dum "Business angel" * distributions set more off qnorm sumont_gdpc * basis for identification of individual outliers (after taking care of country-year outliers, see below - country-level medians) lv sumont_gdpc if country_year != 3203 & country_year != 35403 & country_year != 38603 & country_year != 38604 & country_year != 38605 & country_year != 38606 & country_year != 58203 & country_year != 58205 & country_year != 3902 stem sumont_gdpc if country_year != 3203 & country_year != 35403 & country_year != 38603 & country_year != 38604 & country_year != 38605 & country_year != 38606 & country_year != 58203 & country_year != 58205 & country_year != 3902 lv sumono_gdpc if country_year != 3203 & country_year != 35403 & country_year != 38603 & country_year != 38604 & country_year != 38605 & country_year != 38606 & country_year != 58203 & country_year != 58205 & country_year != 3902 stem sumono_gdpc if country_year != 3203 & country_year != 35403 & country_year != 38603 & country_year != 38604 & country_year != 38605 & country_year != 38606 & country_year != 58203 & country_year != 58205 & country_year != 3902 lv sumone_gdpc if country_year != 3203 & country_year != 35403 & country_year != 38603 & country_year != 38604 & country_year != 38605 & country_year != 38606 & country_year != 58203 & country_year != 58205 & country_year != 3902 stem sumone_gdpc if country_year != 3203 & country_year != 35403 & country_year != 38603 & country_year != 38604 & country_year != 38605 & country_year != 38606 & country_year != 58203 & country_year != 58205 & country_year != 3902 * CORRELATIONS * macro pwcorr pro_rights exconst polity2 durable gov_size hfgov_size busang_prev logit_busang ln_busang credit_pri rlrate rlrate vc_gdp_us_1000 fin_free transition d_gdp gdp_pc_ppp ln_gdp_pc_pp if sumont_gdp!=., obs * with focus on finance excluding outliers pwcorr sumont_gdpc exconst pro_rights hfgov_size gov_size busang_prev credit_pri rlrate rlrate vc_gdp_us_1000 fin_free transition d_gdp gdp_pc_ppp ln_gdp_pc_pp offdep remit nrbloan intldebt if sumont_gdpc != . & country_year != 3203 & country_year != 35403 & country_year != 38603 & country_year != 38604 & country_year != 38605 & country_year != 38606 & country_year != 58203 & country_year != 58205 & country_year != 3902 * DETERMINANTS OF THE AMOUNT OF FINANCE (additional corection - without outlier country_years) * REGRESSIONS * with country_year fixed effects * with WB government size * financial freedom set more off * TABLE 3 EQUATION 1 reg sumont_gdpc age age_sq male gemwork educ_secpost educ_post omestb_dum busang_dum knowent_dum opportunity suowner_mor1 busang_prev fin_free gov_size exconst d_gdp gdp_pc_ppp transition i.country_year if country_year != 3203 & country_year != 35403 & country_year != 38603 & country_year != 38604 & country_year != 38605 & country_year != 38606 & country_year != 58203 & country_year != 58205 & country_year != 3902, vce(robust) * TABLE 3 EQUATION 2 reg sumont_gdpc age age_sq male gemwork educ_secpost educ_post omestb_dum busang_dum knowent_dum opportunity suowner_mor1 busang_prev nrbloan gov_size exconst d_gdp gdp_pc_ppp transition i.country_year if country_year != 3203 & country_year != 35403 & country_year != 38603 & country_year != 38604 & country_year != 38605 & country_year != 38606 & country_year != 58203 & country_year != 58205 & country_year != 3902, vce(robust) * TABLE 3 EQUATION 3 reg sumont_gdpc age age_sq male gemwork educ_secpost educ_post omestb_dum busang_dum knowent_dum opportunity suowner_mor1 busang_prev offdep gov_size exconst d_gdp gdp_pc_ppp transition i.country_year if country_year != 3203 & country_year != 35403 & country_year != 38603 & country_year != 38604 & country_year != 38605 & country_year != 38606 & country_year != 58203 & country_year != 58205 & country_year != 3902, vce(robust) * TABLE 3 EQUATION 4 reg sumont_gdpc age age_sq male gemwork educ_secpost educ_post omestb_dum busang_dum knowent_dum opportunity suowner_mor1 busang_prev remit gov_size exconst d_gdp gdp_pc_ppp transition i.country_year if country_year != 3203 & country_year != 35403 & country_year != 38603 & country_year != 38604 & country_year != 38605 & country_year != 38606 & country_year != 58203 & country_year != 58205 & country_year != 3902, vce(robust) * TABLE 3 EQUATION 5 reg sumont_gdpc age age_sq male gemwork educ_secpost educ_post omestb_dum busang_dum knowent_dum opportunity suowner_mor1 busang_prev nrbloan hfgov_size exconst d_gdp gdp_pc_ppp transition i.country_year if country_year != 3203 & country_year != 35403 & country_year != 38603 & country_year != 38604 & country_year != 38605 & country_year != 38606 & country_year != 58203 & country_year != 58205 & country_year != 3902, vce(robust) * TABLE 3 EQUATION 6 reg sumont_gdpc age age_sq male gemwork educ_secpost educ_post omestb_dum busang_dum knowent_dum opportunity suowner_mor1 busang_prev offdep hfgov_size exconst d_gdp gdp_pc_ppp transition i.country_year if country_year != 3203 & country_year != 35403 & country_year != 38603 & country_year != 38604 & country_year != 38605 & country_year != 38606 & country_year != 58203 & country_year != 58205 & country_year != 3902, vce(robust) set more off * TABLE 4 EQUATION 1 reg sumone_gdpc age age_sq male gemwork educ_secpost educ_post omestb_dum busang_dum knowent_dum opportunity suowner_mor1 busang_prev fin_free gov_size exconst d_gdp gdp_pc_ppp transition i.country_year if country_year != 3203 & country_year != 35403 & country_year != 38603 & country_year != 38604 & country_year != 38605 & country_year != 38606 & country_year != 58203 & country_year != 58205 & country_year != 3902, vce(robust) * TABLE 4 EQUATION 2 reg sumone_gdpc age age_sq male gemwork educ_secpost educ_post omestb_dum busang_dum knowent_dum opportunity suowner_mor1 busang_prev offdep gov_size exconst d_gdp gdp_pc_ppp transition i.country_year if country_year != 3203 & country_year != 35403 & country_year != 38603 & country_year != 38604 & country_year != 38605 & country_year != 38606 & country_year != 58203 & country_year != 58205 & country_year != 3902, vce(robust) * TABLE 4 EQUATION 3 reg sumone_gdpc age age_sq male gemwork educ_secpost educ_post omestb_dum busang_dum knowent_dum opportunity suowner_mor1 busang_prev remit gov_size exconst d_gdp gdp_pc_ppp transition i.country_year if country_year != 3203 & country_year != 35403 & country_year != 38603 & country_year != 38604 & country_year != 38605 & country_year != 38606 & country_year != 58203 & country_year != 58205 & country_year != 3902, vce(robust) set more off * TABLE 4 EQUATION 4 reg sumono_gdpc age age_sq male gemwork educ_secpost educ_post omestb_dum busang_dum knowent_dum opportunity suowner_mor1 busang_prev fin_free gov_size exconst d_gdp gdp_pc_ppp transition i.country_year if country_year != 3203 & country_year != 35403 & country_year != 38603 & country_year != 38604 & country_year != 38605 & country_year != 38606 & country_year != 58203 & country_year != 58205 & country_year != 3902, vce(robust) * TABLE 4 EQUATION 5 reg sumono_gdpc age age_sq male gemwork educ_secpost educ_post omestb_dum busang_dum knowent_dum opportunity suowner_mor1 busang_prev offdep gov_size exconst d_gdp gdp_pc_ppp transition i.country_year if country_year != 3203 & country_year != 35403 & country_year != 38603 & country_year != 38604 & country_year != 38605 & country_year != 38606 & country_year != 58203 & country_year != 58205 & country_year != 3902, vce(robust) * TABLE 4 EQUATION 6 reg sumono_gdpc age age_sq male gemwork educ_secpost educ_post omestb_dum busang_dum knowent_dum opportunity suowner_mor1 busang_prev remit gov_size exconst d_gdp gdp_pc_ppp transition i.country_year if country_year != 3203 & country_year != 35403 & country_year != 38603 & country_year != 38604 & country_year != 38605 & country_year != 38606 & country_year != 58203 & country_year != 58205 & country_year != 3902, vce(robust) * S E L E C T I O N M O D E L S * NOTE: to run this you need to downoad the sartsel ado files from Anne Sartori's webside <> and copy to your ado directory *Generation of new dependent variable * sartori_pos assumes a positive correlation between error terms of selection and outcome equations gen sartori_pos= . replace sartori_pos=0 if startup==0 replace sartori_pos=1 if startup==1 & sumonext_dc==0 replace sartori_pos=2 if startup==1 & sumonext_dc==1 tab sartori_pos, m * sartori_pos assumes a negative correlation between error terms of selection and outcome equations gen sartori_neg=sartori_pos if sartori_pos!= . replace sartori_neg=1 if sartori_pos==2 replace sartori_neg=2 if sartori_pos==1 *generation of country dummies to control for f.e. gen USA=0 replace USA=1 if country==1 gen Russia=0 replace Russia=1 if country==7 gen SouthAfrica=0 replace SouthAfrica=1 if country==27 gen Greece=0 replace Greece=1 if country==30 gen Netherlands=0 replace Netherlands=1 if country==31 gen Belgium=0 replace Belgium=1 if country==32 gen France=0 replace France=1 if country==33 gen Spain=0 replace Spain=1 if country==34 gen Hungary=0 replace Hungary=1 if country==36 gen Italy=0 replace Italy=1 if country==39 gen Switzerland=0 replace Switzerland=1 if country==41 gen Austria=0 replace Austria=1 if country==43 gen UK=0 replace UK=1 if country==44 gen Denmark=0 replace Denmark=1 if country==45 gen Sweden=0 replace Sweden=1 if country==46 gen Norway=0 replace Norway=1 if country==47 gen Poland=0 replace Poland=1 if country==48 gen Germany=0 replace Germany=1 if country==49 gen Peru=0 replace Peru=1 if country==51 gen Mexico=0 replace Mexico=1 if country==52 gen Argentina=0 replace Argentina=1 if country==54 gen Brazil=0 replace Brazil=1 if country==55 gen Chile=0 replace Chile=1 if country==56 gen Colombia=0 replace Colombia=1 if country==57 gen Malaysia=0 replace Malaysia=1 if country==60 gen Australia=0 replace Australia=1 if country==61 gen Indonesia=0 replace Indonesia=1 if country==62 gen Philippines=0 replace Philippines=1 if country==63 gen NewZealand=0 replace NewZealand=1 if country==64 gen Singapore=0 replace Singapore=1 if country==65 gen Thailand=0 replace Thailand=1 if country==66 gen Japan=0 replace Japan=1 if country==81 gen Korea=0 replace Korea=1 if country==82 gen China=0 replace China=1 if country==86 gen Turkey=0 replace Turkey=1 if country==90 gen India=0 replace India=1 if country==91 gen Canada=0 replace Canada=1 if country==101 gen Uganda=0 replace Uganda=1 if country==256 gen Portugal=0 replace Portugal=1 if country==351 gen Ireland=0 replace Ireland=1 if country==353 gen Iceland=0 replace Iceland=1 if country==354 gen Finland=0 replace Finland=1 if country==358 gen Latvia=0 replace Latvia=1 if country==371 gen Croatia=0 replace Croatia=1 if country==385 gen Slovenia=0 replace Slovenia=1 if country==386 gen CzRep=0 replace CzRep=1 if country==420 gen Venezuela=0 replace Venezuela=1 if country==582 gen Ecuador=0 replace Ecuador=1 if country==593 gen Uruguay=0 replace Uruguay=1 if country==598 gen HongKong=0 replace HongKong=1 if country==852 gen Jamaica=0 replace Jamaica=1 if country==876 gen Taiwan=0 replace Taiwan=1 if country==886 gen Jordan=0 replace Jordan=1 if country==962 gen UAE=0 replace UAE=1 if country==971 gen Israel=0 replace Israel=1 if country==972 *elimination of observations - outliers drop if country_year==3203 drop if country_year==35403 drop if country_year==38603 drop if country_year==38604 drop if country_year==38605 drop if country_year==38606 drop if country_year==58203 drop if country_year==58205 drop if country_year==3902 * labels label variable sartori_pos "use of external finance" label variable sartori_pos "Use of external finance" * Note: country controls and time controls are not used as a result of not being able to achieve convergence * TABLE 5 MODEL 1 sartsel sartori_pos age age_sq male gemwork educ_secpost educ_post omestb_dum busang_dum busang_prev fin_free gov_size exconst d_gdp gdp_pc_ppp transition * TABLE 5 MODEL 2 sartsel sartori_pos age age_sq male gemwork educ_secpost educ_post omestb_dum busang_dum busang_prev nrbloan gov_size exconst d_gdp gdp_pc_ppp transition * TABLE 5 MODEL 3 sartsel sartori_pos age age_sq male gemwork educ_secpost educ_post omestb_dum busang_dum busang_prev remit gov_size exconst d_gdp gdp_pc_ppp transition * C O U N T R Y L E V E L D A T A * corrected dependent variables (non zero total finance) * excluding outlier subsamples collapse (median) sumont_gdpc sumono_gdpc sumone_gdpc sumontot_usd sumonown_usd sumonext_usd age male gemwork educ_secpost educ_post omestb_dum busang_dum knowent_dum opportunity suowner_mor1 busang_prev fin_free remit offdep nrbloan gov_size hfgov_size exconst d_gdp gdp_pc_ppp transition if country_year != 3203 & country_year != 35403 & country_year != 38603 & country_year != 38604 & country_year != 38605 & country_year != 38606 & country_year != 58203 & country_year != 58205 & country_year != 3902, by(country) * use "F:\Data\GEM aggregate\GEM finance - medians - no outlier subsamples.dta", clear pwcorr sumont_gdpc sumono_gdpc sumone_gdpc sumontot_usd sumonown_usd sumonext_usd age male gemwork educ_secpost educ_post omestb_dum busang_dum knowent_dum opportunity suowner_mor1 busang_prev fin_free remit offdep nrbloan hfgov_size gov_size exconst d_gdp gdp_pc_ppp transition * GRAPHS set scheme s1mono * with white frame as expected by EMFT * when saving graphs in tif open full window to save full size * d_gdp and own funds (fig.3) twoway lfitci sumono_gdpc d_gdp, legend(off) || scatter sumono_gdpc d_gdp, mlabel(country) legend(off) xtitle("Average GDP growth rate") ytitle("Median amount of own finance for startup (% gdp pc)") * total finance and GDPpc (fig.1) twoway lfitci sumontot_usd gdp_pc_ppp, legend(off) || scatter sumontot_usd gdp_pc_ppp, mlabel(country) legend(off) xtitle("GDP per capita (ppp)") ytitle("Median amount of total finance for startup (USD)") * total funds and offshore deposits (fig.2) twoway lfitci sumontot_usd offdep || scatter sumontot_usd offdep, mlabel(country) legend(off) xtitle("Offshore deposits") ytitle("Median amount of total finance for startup (USD)")