6AR1 and Hansen tests for validity of instruments are reported in Table 1. Due to the shortness of the panel and the use of variables in changes, AR2 tests can only be computed as robustness checks from estimations similar than those presented but omitting the variables in changes (in order to gain an extra time period). Key results for the rest of the variables do not change and serial correlation does not appear to be a problem. Correlation analysis for the key variables reveals substantial explanatory power for lagged differences to explain levels and for lagged levels to explain first differences.