State dependence and exchange rate regime choice: a new empirical explanation to the polarization phenomenon

Figures & data

Table 1. Statistical description of sample in 155 economies.

Variable	155 Economies		Fixed Exchange Rate		Intermediate Exchange Rate		Floating Exchange Rate		Z-statistics^5
	Mean Value	Standard Deviation	Mean Value	Standard Deviation	Mean Value	Standard Deviation	Mean Value	Standard Deviation	Intermediate-fixed	Intermediate-floating
ka_open	0.462	0.367	0.525	0.369	0.432	0.356	0.398	0.387	−3.020***	0.706
reserve	0.700	5.450	0.786	6.443	0.721	5.127	0.288	2.513	−2.044***	8.641***
nfa_gdp	−0.412	1.608	−0.270	1.347	−0.415	1.712	−0.813	1.745	−4.485***	8.313***
cpinf	0.096	0.142	0.047	0.067	0.082	0.076	0.326	0.286	1.151	−5.193***
nomshk_t	0.143	0.151	0.102	0.117	0.137	0.105	0.317	0.279	1.110	−3.691***
gdppcg	0.018	0.062	0.021	0.069	0.024	0.050	−0.012	0.076	0.091	0.772
rgdpg	0.036	0.064	0.040	0.069	0.041	0.056	0.003	0.073	0.029	0.798
tradeope	0.831	0.553	1.001	0.609	0.774	0.507	0.553	0.368	−7.410***	4.761***
zhougon	0.767	0.098	0.778	0.096	0.761	0.097	0.761	0.105	−0.552	0.012
lsize	2.831	2.371	2.289	2.324	3.056	2.223	3.500	2.816	25.259***	−9.650***
lnlevel	7.853	1.584	8.115	1.662	7.743	1.464	7.521	1.740	−12.238***	4.767***
polity2	2.405	7.025	1.559	7.466	2.911	6.715	2.430	6.943	41.830***	10.384***
actotal	0.733	1.772	0.286	1.089	0.940	2.003	1.030	1.940	20.387***	−1.950*
ldcpsgdp	0.429	0.399	0.456	0.402	0.401	0.349	0.478	0.575	−1.771*	−1.587
ca	−0.033	0.106	−0.036	0.121	−0.029	0.097	−0.045	0.091	0.226	0.352

Note: (1) Z statistics in columns 10 and 11 of the table give the main result of mean-comparison tests. In the original hypothesis, the mean value of the variable is equal under the two groups of exchange rate regimes. *, ***, and *** indicate that the significance level is high at the significant level of 10%, 5% and 1%, respectively; (2) Because this paper focuses on the intermediate exchange rate regime, Z statistics give the mean value comparison test of corresponding variables such as the intermediate exchange rate regime relative to the fixed exchange rate regime and the intermediate exchange rate regime relative to the floating exchange rate regime. For example, the mean values of the capital account openness (ka_open) variable under the fixed exchange rate system, the intermediate exchange rate regime and the floating exchange rate regime are 0.525, 0.432, and 0.398, respectively. The mean value comparison test shows that the capital account openness under the intermediate exchange rate regime is less than that under the fixed exchange rate regime and is statistically significant; the capital account openness under the intermediate exchange rate regime is greater than that under the floating exchange rate regime and is statistically significant.

Table 2. Estimation results of the multinomial choice random effect panel logit model.

Variable	155 Economies		Developing Economies		Emerging Market Economies		Developed Economies
	Fixed	Floating	Fixed	Floating	Fixed	Floating	Fixed	Floating
ka_open	1.271***	−0.866**	−1.144***	−2.279***|	1.238*	−0.030	−2.242	23.071
	(0.170)	(0.391)	(0.412)	(0.611)	(0.646)	(1-123)	(2.168)	(51.761)
reserve	0.057***	−2.869***	0491***	−3.792***	−0.633	−3.851	0.321***	−3.270
	(0.009)	(0.398)	(0.069)	(0.488)	(1.458)	(2.895)	(0.055)	(47.170)
nfa_gdp	−0.813***	−0.189**	−0.462***	0.012	2.247*	−0.826	−3.981***	9.755
	(0.093)	(0.076)	(0.161)	(0.103)	(1.275)	(1-621)	(1.334)	(16.920)
cpinf	−2.624**	7.802***	−0.881	5.680***	−6.385	8.311*	−33.616	0.815
	(1.189)	(0.774)	(1-519)	(1.097)	(7.981)	(4.603)	(34.437)	(329.228)
nomshk_t	0.673	1.610*	−0.572	1.991	0.372	3.926	−6.612	−52.629
	(1.325)	(0.900)	(2.039)	(1.311)	(6.745)	(5.227)	(8.182)	(87.240)
gdppcg	5.034**	−4.656**	2.499	−4.385*	6.097	−1.323	4.478	−52.046
	(2.153)	(2.163)	(3.548)	(2.498)	(8.121)	(14.053)	(17.572)	(202.764)
tradeope	0.809***	−1.726***	0.151	−0.199	−0.782	−3.444*	7.078***	−128.202***
	(0.183)	(0.306)	(0.304)	(0.377)	(0.715)	(1.952)	(1.613)	(47.182)
zhougon	0.257	5.554***	−6.802***	3.008*	13.502***	10.130***	−47.589***	−66.831
	(0.711)	(1.252)	(1.372)	(1.551)	(2.269)	(3.300)	(8.260)	(183.233)
phlity2	−0.135***	−0.037***	−0.003	−0.093***	−0.248***	0.097*	Null^6	Null
	(0.010)	(0.013)	(0.018)	(0.018)	(0.045)	(0.057)	Null	Null
actotal	−0.014	−0.047	−0.248***	−0.033	0.351***	−0.254	−27.091	−10.040
	(0.038)	(0.059)	(0.065)	(0.083)	(0.100)	(0.217)	(0.505)	(9.999)
ldcpsgdp	1.819***	2.926***	−1.274*	−0.950	2.838***	1.100	12.128***	23.230**
	(0.195)	(0.325)	(0.713)	(0.865)	(0.873)	(1-542)	(2.615)	(10.356)
ca	2.392***	−2 994***	2.198	−1.534	3.432	−24.246**	14.670	−15.841
	(0.906)	(1.068)	(1.817)	(0.983)	(4-275)	(11.258)	(10.405)	(222.492)
${\mathrm{\alpha }}_1$	−2.589***(0.617)		3.984***(1.231)		−14.083***(2.134)		18.441***(5_636)
${\mathrm{\alpha }}_2$	−8.034***(1.116)		−3.922***(1.345)		−11.364***(2.615)		67.292(152.211)
${\mathrm{\sigma }}_{11}$	69.720***(0.000)		79.100***(0.000)		11.130***(0.000)		417.2_(0.000)
${\mathrm{\sigma }}_{22}$	6.063***(0.000)		4.992***(0.000)		1.323***(0.001)		84.39**(0.017)
${\mathrm{\sigma }}_{12}$	−7.598***(0.000)		6.561***(0.001)		1.373(0.230)		112.4(0.172)
Log-likelihood	−1162.739		−664.863		−251.605		−93.960
Observations	3192		1954		665		573

Note: (1) The number in the bracket is the robust standard error⁷; (2) ***, **, and * indicate that the significance level is high at 1%, 5%, and 10%, respectively; (3) Estimation is made by simulation based maximum simulation likelihood in the multinomial choice random effect panel Logit model, i.e., numerical simulations are obtained by the mixed logit simulator. Specifically, the above estimation process is implemented with the Halton Draws method, and the number of extractions R is set to 50. Extraction is also conducted for 20 times and 25 times in this paper, and it is found that the estimation results are robust to the number of extractions; (4) ${\mathrm{\alpha }}_1$ and ${\mathrm{\alpha }}_2$ are the estimated values of the random effect mean value, and $\mathrm{\sigma }$₁₁, $\mathrm{\sigma }$₂₂, and$\mathrm{ }\mathrm{\sigma }$₁₂ are the estimated values in the random effect variance - covariance matrix. Since the multinomial choice random effect panel Logit model setting in this paper allows the correlation of random effects, there are parameters in the estimation results. (5) The numbers in the brackets in the$\mathrm{ }\mathrm{\sigma }$₁₁, $\mathrm{\sigma }$₂₂, and$\mathrm{ }\mathrm{\sigma }$₁₂ parameter estimation results are the p values.

Table 3. Estimation results of the dynamic multinomial choice random effect panel logit model.

Variable	155 Economies		Developing Economies		Emerging Market Economies		Developed Economies
	Fixed	Floating	Fixed	Floating	Fixed	Floating	Fixed	Floating
ka_open	1.716***	−0.735	0.840	−1.202*	0.557	−0.245	4.757***	4.005
	(0.330)	(0.457)	(0.641)	(0.680)	(0.805)	(1.509)	(1.575)	(10.610)
reserve	0.037***	−3.128***	0.054	−3.359***	0.209	−2.339	0.069***	0.130
	(0.013)	(0.491)	(0.088)	(0-577)	(3.051)	(3.356)	(0.022)	(1.343)
nfa_gdp	−0.379***	0.005	−0.471**	−0.056 (0.140)	1.566	0.770	0.425	−0.552
	(0.140)	(0.115)	(0.191)		(1.869)	(2.767)	(1.115)	(6.130)
cpinf	−3.836**	3.591***	−3.614*	2.646**	−8.770	4.117	−74.706***	49.559
	(1.654)	(1.101)	(2.133)	(1.246)	(9.514)	(5.621)	(19.060)	(60.011)
nomshk_t	−0.299	0.864	−1.239	0.452	1.857	4.499	Null	Null
	(1.553)	(0.937)	(2.054)	(1.198)	(9.372)	(5.526)
gdppcg	6.994**	−1.189	6.240	−1.692	4.366	1.779	2.489	18.515
	(2.732)	(2.470)	(4.616)	(2.619)	(7.645)	(15.929)	(10.391)	(62.091)
tradeope	0.405	−1.208***	0.516	−0.146	0.986	−2.080	−0.028	−22.630**
	(0.272)	(0.323)	(0.448)	(0.396)	(1.153)	(2.320)	(0.606)	(9.368)
zhougon	−0.442	4.647***	−2.274	2.390	2.085	7.895**	2.619	−16.970
	(1.260)	(1.338)	(1.957)	(1.796)	(3.241)	(3.823)	(5.559)	(22.802)
phlity2	−0.044**	−0.024	0.021	−0.049**	−0.131**	0.079	Null	Null
	(0.017)	(0.016)	(0.027)	(0.023)	(0.052)	(0.067)
actotal	−0.038	−0.091	−0.125	−0.082	0.085	−0.258	Null	Null
	(0.062)	(0.069)	(0.098)	(0.087)	(0.116)	(0.233)
ldcpsgdp	0.205	1.526***	−0.752	−0.176	−0.467	−0.101	−0.325	6.545*
	(0.333)	(0.346)	(1.233)	(0.787)	(1.442)	(1.755)	(1.301)	(3.402)
ca	1.277	−4.793***	0.804	−1.778	−0.482	−25.226	−7.405	26.616
	(1.459)	(1.174)	(2.466)	(1.226)	(8.552)	(16.867)	(10.704)	(69.862)
ditLAG^8	−5.493***	−3.386***	−5.297***	−3.370***	4.874***	−2.567*	8.637***	0.921
	(0.284)	(0.234)	(0.386)	(0.301)	(1.034)	(1.422)	(1.607)	(5.924)
${\mathrm{\alpha }}_1$	0.592(1.061)		2.098(1.697)		−0.413(2.388)		−7.127 (4.438)
${\mathrm{\alpha }}_2$	−3.730*** (1.168)		−1.164(1.502)		−6.941** (3.209)		5.573(13.074)
${\mathrm{\sigma }}_{11}$	13.250***(0.000)		26.860***(0.000)		1.028***(0.001)		6.934***(0.001)
${\mathrm{\sigma }}_{22}$	2_533***(0.000)		0.891 ***(0.007)		0.439**(0.031)		5.354(0.977)
${\mathrm{\sigma }}_{12}$	4.890*** (0.000)		3.445(0.001)		−0.100(0.749)		6.093(0.181)
Log-likelihood	−815.108		−495.789		−177.661		−91.766
Observations	3119		1954		665		629

Note: (1) The number in bracket is the robust standard error; (2) ***, **, and * indicate that the significance level is high at 1%, 5%, and 10% respectively; (3) The dynamic multinomial choice random effect panel Logit model is also estimated with the Halton Draws method, and the number of extractions R is set to 50. Extraction is also conducted for 20 times and 25 times in this paper, and it is found that the estimation results are robust to the number of extractions; (4) ${\mathrm{\alpha }}_1$ and ${\mathrm{\alpha }}_2$ are the estimated values of the random effect mean value, and $\mathrm{\sigma }$₁₁, $\mathrm{\sigma }$₂₂, and $\mathrm{\sigma }$₁₂ are the estimated values in the random effect variance - covariance matrix. Since the multinomial choice random effect panel Logit model setting in this paper allows the correlation of random effects, there are $\mathrm{\sigma }$₁₁, $\mathrm{\sigma }$₂₂, and $\mathrm{\sigma }$₁₂ in the estimation results; (5) The numbers in the brackets in the $\mathrm{\sigma }$₁₁, $\mathrm{\sigma }$₂₂, and $\mathrm{\sigma }$₁₂ parameter estimation results are the p values. Theoretical econometricians believe that there is no need to report the significance level of the covariance matrix, so Nlogit 6.0 does not report its significance level when estimating the covariance matrix of random effects. To be consistent with the literature (e.g., Hagen & Zhou, 2007), the significance level of the Cholesky matrix (denoted as L, L*L' = Σ) is reported here as a reference; (6) The reason why the estimation results for variables of nomshk_t, polity2, and actotal for the developed economies are null is that the data characteristics of these variables lead the covariance matrix obtained by maximum likelihood estimation to be the singular matrix. Therefore, these variables are eliminated when this group of samples is estimated.

Table 4. Average partial effects corresponding to parameter estimation for the of the dynamic multinomial choice random effect panel logit model.

Variable	155 Economies Sample		Developing Economies		Emerging Market Economies		Developed Economies
	Fixed	Floating	Fixed	Floating	Fixed	Floating	Fixed	Floating
ka_open	0.154***	−0.073***	0.118**	−0.113**	0.025	−0.012	0.154**	0.025
	(0.027)	(0.021)	(0.057)	(0.045)	(0.035)	(0.051)	(0.065)	(0.055)
reserve	0.074***	−0.143***	0.114***	−0.240***	0.022	−0.083	0.002***	0.001
	(0.014)	(0.024)	(0.023)	(0.040)	(0.129)	(0-117)	(0.001)	(0.009)
nfa_gdp	−0.030***	0.009**	−0.042***	0.011	0.063	0.018	0.014	−0.004
	(0.009)	(0.003)	(0.015)	(0.007)	(0.083)	(0.096)	(0.037)	(0.040)
cpinf	−0.388***	0.251***	−0.426**	0.305***	−0.400	0.194	−2.452***	0.343
	(0.127)	(0.056)	(0.204)	(0.104)	(0.358)	(0.185)	(0.689)	(0.244)
nomshk_t	−0.044	0.046	−0.131	0.072	0.055	0.148	Null Null	Null Null
	(0.124)	(0.054)	(0.190)	(0.100)	(0.386)	(0.174)
gdppcg	0.585***	−0.213*	0.642	−0.323	0.178	0.038	0.077	0.121
	(0.207)	(0.114)	(0.406)	(0.197)	(0.309)	(0.548)	(0.348)	(0.393)
tradeope	0.060***	−0.064***	0.053	−0.027	0.054	−0.079	0.005	−0.148*
	(0.022)	(0.016)	(0.040)	(0.028)	(0.044)	(0.083)	(0.018)	(0.086)
zhougon	−0.141	0.222***	−0.292*	0.243**	0.046	0.266**	0.090	−0.112
	(0.097)	(0.056)	(0.171)	(0.114)	(0.141)	(0.133)	(0.175)	(0.132)
phlity2	−0.003**	−0.000	0.004	−0.004***	−0.006***	0.004	Null Null	Null Null
	(0.001)	(0.001)	(0.002)	(0.002)	(0.002)	(0.003)
actotal	−0.001	−0.003	−0.009	−0.002	0.005	−0.010	Null Null	Null Null
	(0.005)	(0.003)	(0.009)	(0.006)	(0.005)	(0.008)
ldcpsgdp	−0.018	0.065***	−0.065	0.012	−0.020	−0.001	−0.012	0.043
	(0.026)	(0.016)	(0.117)	(0.065)	(0.060)	(0.062)	(0.042)	(0.034)
ca	0.211*	−0.247***	0.134	−0.152	0.120	−0.884	−0.248	0.176
	(0.110)	(0.058)	(0.221)	(0.097)	(0.388)	(0.578)	(0.357)	(0.438)

Note: (1) The figure in the brackets is robust standard error; (2) ***, ** and * indicate that the significance level is high at 1%, 5%, and 10%. (3) The reason why the estimation results for variables of nomshk_t, polity2, and actotal for the developed economies are null is that the data characteristics of these variables lead the covariance matrix obtained by maximum likelihood estimation to be the singular matrix. Therefore, these variables are eliminated when this group of samples is estimated.

Appendix 1. The related empirical researches from 1978 to 2016.

Number	Sample (quantity, grouping）		Sample period	Econometric model, exchange rate regimes classification	Estimation method
1	88	Developing	1976	Ordered Choice, Trichotomy	Cross-section
2	64	Developed, Developing	1979	Ordered Choice, Trichotomy	Cross-section
3	39	Developing	1976-1984	Binary Choice, Dichotomy	Pool Estimation of Panel Data Model
4	43	Developing	1979-1986	Ordered Choice, Trichotomy	Pool Estimation of Panel Data Model
5	125	Developed, Developing	1991	Multinomial Choice, Trichotomy	Cross-section
6	63	Developed, Developing	1980-1992	Binary Choice, Dichotomy	Pool Estimation of Panel Data Model
7	70	Developed, Developing	1979-1992	Binary Choice, Dichotomy	Cross-section
8	125	Developing	1977-1995	Ordered Choice, Trichotomy	Cross-section
9	20	Developed	1974-1995	Binary Choice, Dichotomy	Pool Estimation of Panel Data Model
10	65	Developing	1980-1994	Binary Choice, Dichotomy	Panel Random Effect Model
11	93	Developing	1999	Ordered Choice, Trichotomy	Cross-section
12	125	Developed, Developing	1980-1994	Binary Choice, Dichotomy	Pool Estimation of Panel Data Model
13	130	Developed, Developing	1990-2000	Multinomial Choice, Trichotomy	Cross-section
14	25	Transition Economy	1990-1999	Ordered Choice, Trichotomy	Pool Estimation of Panel Data Model
15	128	Developing	1981-1999	Multinomial Choice, Trichotomy	Dynamic Multinomial Choice Random Effect Panel Logit Model
16	34	Multi-area	1973-1996	Ordered Choice, Trichotomy	Panel Fixed Effect Model
17	183	Industrialization, Non-industrialization	1974-2003	Multinomial Choice, Trichotomy	Pool Estimation of Panel Data Model
18	180	Developed, Developing	1974-2004	Multinomial Choice, Trichotomy	Panel Fixed Effect Model
19	182	Developed, Emerging, Developing	1971-2011	Binary Choice, Dichotomy	Pool Estimation of Panel Data Model
20	150	Emerging, Developing	1974-2007	Binary Choice, Dichotomy	Pool Estimation of Panel Data Model
21	31	Emerging	1990-2010	Multinomial Choice, Trichotomy	Pool Estimation of Panel Data Model

Note: The above literatures are not listed in the reference, and are available on request.

Appendix 2. The exchange rate regimes classification of Ilzetzki et al. (2019).

	Coarse Classification	Fine Classification	Exchange Rate Regimes
Hard Pegs	1	1	1. No separate legal tender or currency union
	1	2	2. Pre announced peg or currency board arrangement
	1	3	3. Pre announced horizontal band that is narrower than or equal to +/−2%
	1	4	4. De facto peg
Soft Pegs	2	5	5. Pre announced crawling peg; de facto moving band narrower than or equal to+/−1%
	2	6	6. Pre announced crawling band that is narrower than or equal to +/−2% or de facto horizontal band that is narrower than or equal to +/−2%
	2	7	7. De facto crawling peg
	2	8	8. De facto crawling band that is narrower than or equal to +/−2%
	3	9	9. Pre announced crawling band that is wider than or equal to +/−2%
	3	10	10. De facto crawling band that is narrower than or equal to +/−5%
	3	11	11. Moving band that is narrower than or equal to +/−2% (i.e., allows for both appreciation anddepreciation over time)
	3	12	12. De facto moving band +/−5%/ Managed floating
	6	15	15. Dual market in which parallel market data is missing
Floating	4	13	13. Freely floating
	5	14	14. Freely falling

Appendix 3. The names and meanings of explanatory variables and control variables.

Number	Name	Meaning	Measuring Methods and Data Source	Theoretical Foundation
1	ka_open	Openness of Capital Account	Chinn&Ito (2008)	Core Explain Variable
2	reserve	Adequacy of Foreign Exchange Reserves	Non-gold Foreign Exchange Reserves/Broand Money, IMF IFS	Core Explain Variable
3	nfa_gdp	Currency Mismatch	Lane&Milesi-Ferretti (2007)	Core Explain Variable
4	cpinf	Nominal Shock(Inflation)	CPI Growth Rate, IMF WEO	Mundell-Fleming Model
5	nomshk_t	Nominal Shock(Broad Money Expasion)	Broad Money Growth Rate, IMF WEO	Mundell-Fleming Model
6	gdppcg	Real shock(Growth Rate of Real GDP per Capita)	Growth Rate of Real GDP per Capita, World Bank WDI	Mundell-Fleming Model
7	rgdpg	Real shock(Real GDP Growth Rate)	Real GDP Growth Rate, World Bank WDI	Mundell-Fleming Model
8	tradeope	Trade Openness	Volumn of Import and Export /GDP, IMF WEO	Optimal Currency Area Theory
9	zhougon	Trade Concentration	Trading Volumn of Top 10 Trading Partners/Total Trading Volumn (Hagen and Zhou, 2007) IMF Direction of Trade Statistics	Optimal Currency Area Theory
10	lsize	Economy Scale	Log of GDP in Dollar, IMF WEO	Optimal Currency Area Theory
11	lnlevel	Economy Development Level	Log of GDP per Capita in Dollar, IMF WEO	Optimal Currency Area Theory
12	polity2	Degree of Democracy	Center for Systemic Peace	New Political Economy Theory of Exchange Rate Regimes Choice
13	actotal	Degree of Political Instability	Center for Systemic Peace	New Political Economy Theory of Exchange Rate Regimes Choice
14	ldcpsgdp	Financial Market Development Level	Loan of Domestic Private Sectors /GDP, World Bank WDI	Impossible Triangle Theory
15	ca	Current Account	Balance of Current Account/GDP, IMF WEO	Monetary Crisis Theory

Appendix 4. Estimation results of multinomial choice panel logit model with pool estimation.

Variable Name	155 Economies Sample		Developing Economies		Emerging Economies		Developed Economies
	Fixed	Floating	Fixed	Floating	Fixed	Floating	Fixed	Floating
ka_open	0.341** (0.133)	0.095 (0.243)	0.147 (0.165)	−0.617 (0.408)	0.529 (0.343)	0.400 (0.760)	1.306** (0.588)	5.975*** (2.307)
reserve	0.014*** (0.005)	−2.832*** (0.602)	0.003 (0.042)	−2.724*** (0.614)	0.774 (0.935)	−3.270** (1.410)	0.022*** (0.005)	−0.402 (2.337)
nfa_gdp	−0.153*** (0.054)	−0.331* (0.197)	−0.057 (0.050)	−0.202 (0.197)	0.899 (0.563)	0.738 (1.264)	−0.218 (0.305)	2.701 (3.714)
cpinf	−5.542*** (1.151)	6.806*** (1.108)	−5.497*** (1.263)	5.182*** (1.262)	−1.942 (1.982)	9.021*** (2.567)	−13.620** (5.644)	11.778 (22.325)
nomshk_t	−1.722*** (0.491)	1.273 (0.967)	−2.651*** (0.618)	1.361 (1.163)	1.501 (1.480)	3.934* (2.201)	0.970 (1.579)	−12.283 (12.701)
gdppcg	−0.918 (0.802)	−3.726** (1.648)	−1.118 (0.835)	−5.956*** (1.868)	−2.439 (3.482)	−3.163 (4.932)	−1.457 (3.296)	34.869 (30.984)
tradeope	0.115 (0.087)	−2.697*** (0.377)	0.815*** (0.150)	−0.037 (0.336)	0.642* (0.385)	−2.259 (1.642)	−0.608*** (0.183)	−61.570*** (12.579)
zhougon	0.898* (0.509)	2.684*** (0.741)	0.183 (0.656)	2.817*** (1.046)	−0.147 (1.677)	4.818** (2.093)	−10.479*** (1.569)	−6.012 (6.326)
polity2	−0.066*** (0.007)	−0.029** (0.012)	−0.051*** (0.008)	−0.049*** (0.014)	−0.142*** (0.022)	0.084* (0.047)	−0.118*** (0.044)	22.715 (145568.1)
actotal	−0.224*** (0.039)	−0.222*** (0.046)	−0.171*** (0.044)	−0.152*** (0.056)	−0.115 (0.090)	−0.214* (0.120)	−31.877*** (0.885)	−4.999*** (1.675)
ldcpsgdp	0.082 (0.144)	1.880*** (0.205)	−0.951*** (0.344)	−0.939 (0.808)	0.753 (0.464)	−0.118 (1.211)	0.994*** (0.333)	10.235*** (2.463)
ca	−0.575 (0.523)	−1.739 (1.235)	0.994 (0.605)	0.449 (1.191)	0.615 (2.673)	−21.354*** (6.659)	−3.613 (2.517)	−35.752 (32.304)
Cons	−0.758* (0.419)	−3.426*** (0.599)	−0.005 (0.549)	−3.889*** (0.906)	−2.141* (1.221)	−6.869*** (1.982)	7.132*** (1.389)	−210.496 (0.181)
Chi squared	1189.973***		701.949***		343.855***		608.997***
Log-likelihood	−2376.937		−1476.416		−312.796		−273.185
Pseudo R2	0.200		0.192		0.355		0.527
Observations	3192		1954		665		573

Note: (1) The numbers in parentheses are clustered standard error; (2) ***, **, and * represent significant levels of significance. at 1%, 5%, and 10%, respectively.

Appendix 5. Comparison of the effects of state dependence on estimation results.

Variable Name	155 Economies Sample						Developing Economies
	Fixed			Floating			Fixed			Floating
ka_open	P	RE	DRE		RE			RE			RE	DRE
reserve	P	RE	DRE	P	RE	DRE		RE		P	RE	DRE
nfa_gdp	P	RE	DRE	P	RE			RE	DRE
cpinf	P	RE	DRE	P	RE	DRE	P		DRE	P	RE	DRE
nomshk_t	P				RE		P			P
gdppcg		RE	DRE	P	RE						RE
tradeope		RE		P	RE	DRE	P			P
zhougon	P			P	RE	DRE		RE			RE
polity2	P	RE	DRE	P	RE		P			P	RE	DRE
actotal	p			P			P	RE		P
ldcpsgdp		RE		P	RE	DRE	P	RE			RE
ca		RE			RE	DRE
	Emerging Economies						Developed Economies
Variable Name	Fixed			Floating			Fixed			Floating
ka_open		RE					P		DRE	P
reserve				P			P	RE	DRE
nfa_gdp		RE						RE
cpinf				P	RE		P		DRE
nomshk_t				P
gdppcg
tradeope	P				RE		P	RE		P	RE	DRE
zhougon		RE		P	RE	DRE	P	RE
polity2	P	RE	DRE	P	RE		P
actotal		RE		P			P			P
ldcpsgdp		RE					P	RE		P	RE	DRE
ca				P	RE

Note: (1) P, RE, and DRE respectively represent the estimation results of multinomial choice panel logit model with pool estimation, multinomial choice random effect panel logit model and dynamic multinomial choice random effect panel logit model; (2) P, RE, DRE appearing in one grid indicates that the explanatory variable or control variable corresponding to the model is significant in the estimation result; (3) The shaded part in the table represents the dynamic multinomial choice random effect panel logit model, the relevant variable parameter estimation result is significant, the number of shaded parts (DRE) To be less than the number of P and RE, the introduction of a dynamic model (true state dependent) will reduce the number of significant estimates of the parameters.

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