Table 4 Results for the long-run and...

Table 4

Results for the long-run and short-run effect of FDI on trade balance from the ARDL model

Variable	Coefficient	Std. error	T-statistics	Prob.
Long-run estimates
FDI	0.425	0.104	4.069	0.000***
GEX	0.221	0.479	0.461	0.648
REER	−0.953	0.167	−5.689	0.000***
INF	−0.521	0.217	−2.404	0.023**
AGR	1.291	0.734	1.756	0.093*
C	−2.550	2.192	−1.163	0.255
Short-run estimates
Δ (FDI)	0.268	0.155	1.733	0.094*
Δ (REER)	−0.517	0.146	−3.535	0.002***
Δ (INF)	−0.224	0.071	−3.139	0.004***
CointEq (−1)*	−0.768	0.152	−5.059	0.000***
C	−1.391	0.223	−6.238	0.000***
@TREND	0.002	0.002	0.987	0.332
R-squared	0.677	Akaike info criterion		1.084
Adjusted R-squared	0.647	Schwarz criterion		1.205
Log-likelihood	27.283	Durbin-Watson stat		2.059
F-statistic	15.46	Prob (F-statistic)		0.000

Variable	Coefficient	Std. error	T-statistics	Prob.
Long-run estimates
FDI	0.425	0.104	4.069	0.000***
GEX	0.221	0.479	0.461	0.648
REER	−0.953	0.167	−5.689	0.000***
INF	−0.521	0.217	−2.404	0.023**
AGR	1.291	0.734	1.756	0.093*
C	−2.550	2.192	−1.163	0.255
Short-run estimates
Δ (FDI)	0.268	0.155	1.733	0.094*
Δ (REER)	−0.517	0.146	−3.535	0.002***
Δ (INF)	−0.224	0.071	−3.139	0.004***
CointEq (−1)*	−0.768	0.152	−5.059	0.000***
C	−1.391	0.223	−6.238	0.000***
@TREND	0.002	0.002	0.987	0.332
R-squared	0.677	Akaike info criterion		1.084
Adjusted R-squared	0.647	Schwarz criterion		1.205
Log-likelihood	27.283	Durbin-Watson stat		2.059
F-statistic	15.46	Prob (F-statistic)		0.000

Granger causality test results
Null hypothesis	F-statistic	Prob.
TB does not Granger cause FDI	0.726	0.492
FDI does not Granger cause TB	5.881	0.007***

Granger causality test results
TB does not Granger cause FDI	0.726	0.492
FDI does not Granger cause TB	5.881	0.007***

Note(s): Dependent variable: trade balance. *, **, and *** indicate the rejection of the null hypothesis of no effect or causality at 10%, 5%, and 1% significance levels

Δ(AGR) was excluded due to its lack of significant contribution in the short run, guided by the principle of parsimony

Source(s): Produced from BoG, IMF and WDI data, 2024

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