ECONOMICS UNIQUENESS

194 ■ THE ECONOMICS OF UNIQUENESS
and Jones (1999), and the logarithm of settlers’ mortality, hereaft er lnsetmort,
suggested by Acemoglu, Johnson, and Robinson (2001).
Results
Growth regressions are estimated using instrumental variables techniques
(IV).Th e fi rst and the second stage of the various IV regressions performed
are shown in table 7.3. Standard errors for the second stage and fi rst stage are
corrected for the statistical pitfalls stemming from sub-populations having different
variabilities than others, using standard White correction. Regressions
(1) through (3) are growth regressions augmented with Tourism but excluding
other endogenous variables. Regressions (4) and (5) control for Trade and Institution,
respectively, using their associated instruments. Regression (6) includes
both Trade and Institution.
Results of the second stage regressions, shown in the lower panel of table 7.3,
point to a remarkably robust coeffi cient associated with Tourism. Th e coeffi cient
ranges from 0.012 to 0.017 and is always signifi cant across all specifi cations.
Overall, the signs and magnitudes of the coeffi cients of the common regressors
for economic growth are consistent with standard growth regressions. Th e sign
associated with Income is always negative, supporting the convergence hypothesis,
albeit not always signifi cant. Th e regressions also provide evidence of the
positive impact of Education, the negative eff ect of Kprice, and a positive impact
of Institution on economic growth, as expected. Trade has the expected positive
sign but is not signifi cant in most regressions. Th is result could be explained
partly by the inclusion of Distance in our benchmark specifi cation.
Equation (2) constitutes our benchmark specifi cation. Our results suggest
that, with all other factors being equal, an increase in tourism by one sample
standard deviation, that is 8 percentage points (where Tourism is measured in
percentage), implies an increase in growth per capita by 10.4 percent. Such an
increase over a 22-year period corresponds to an annualized additional growth
of about 0.5 percentage points per year. Th is is a signifi cant number but should be
put in perspective with the required expansion in tourism receipts.
Th e upper panel in table 7.3 shows the results of the fi rst stage IV regressions.
UNESCO is signifi cant in all the fi rst stage regressions of Tourism. Th e
p-value associated with the F-test indicates that the instrument used for Tourism
is not weak in all the fi rst stage regressions. Excluding regression (1), its coeffi
cient ranges from 29 to 32. In addition, Engfrac, corresponding to the fraction
of the population speaking English, has a positive coeffi cient in the fi rst stage
regression of Institution but the F-test indicates that the instrument tends to be
weak, as shown in equation (5) and (6). In contrast, the coeffi cient associated
with lnfrinstex in the fi rst stage regression for Trade has the right sign and is