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We a d o p t th e a ssu m p tio n o f w e a k e x o g e n e ity o f G D P g row th ra te , tra d e o p e n n e ss, fo re ig n d ire c t inve stm e nt in ?ow a n d c e ntra l g ove rn m e nt tra n sfe rs a n d th e a ssu m p tio n o f stric t e x o g e n e ity o f p o p u la tio n d e n sity, tre n d a n d u rb a n iz a tio n ra te . T h e w e ig hte d ave ra g e ve c to r o f p e r c a p ita p u b lic sp e n d in g in o th e r p rov in c e s is a lso in stru m e nte d by th e w e ig hte d ave ra g e o f n e ig hb o rs' c o ntro l va ria b le s. We c o lla p se in stru m e nts a n d lim it its nu m b e r ,
We a d o p t th e a ssu m p tio n o f w e a k e x o g e n e ity o f G D P g row th ra te , tra d e o p e n n e ss, fo re ig n d ire c t inve stm e nt in ?ow a n d c e ntra l g ove rn m e nt tra n sfe rs a n d th e a ssu m p tio n o f stric t e x o g e n e ity o f p o p u la tio n d e n sity, tre n d a n d u rb a n iz a tio n ra te . T h e w e ig hte d ave ra g e ve c to r o f p e r c a p ita p u b lic sp e n d in g in o th e r p rov in c e s is a lso in stru m e nte d by th e w e ig hte d ave ra g e o f n e ig hb o rs' c o ntro l va ria b le s. We c o lla p se in stru m e nts a n d lim it its nu m b e r ,