On the Determinants of Foreign Capital Flows - DAAD partnership ...

LOPEN Yes
25.02
(0.0000)
LINV
No
2.56
(0.4637)
LPRO Yes
22.03
(0.0001)
LRER Yes
8.74
(0.0329)
Yes
16.09
(0.011)
Yes
12.81
(0.0051)
Yes
15.20
(0.0017)
Yes
12.87
(0.0049)
- Yes
17.94
(0.0005)
No
1.03
(0.7945)
No
3.19
(0.3630)
No
2.15
(0.5424)
Discussion of results from the VECM
23
No
5.67 (0.1290)
- No
1.73 (0.5874)
Yes
19.72
(0.0002)
No
7.81 (0.0583)
Yes
22.53
(0.0001)
Yes
12.17
(0.0068)
- Yes
27.41
(0.0000)
Yes
8.81 (0.0319)
-.4684196
t-stat : -2.03
(0.048)
-.7097322
t-stat : -4.52
(0.000)
-.1362406
t-stat : -1.20
(0.077)
- -.2592053
t-stat : -2.20
(0.037)
The variables in the first column are taken as the independent variables namely as those
causing the other variables in the first row- being as LFDI causing LGDP, LRER, LOPEN,
LPRO or still LINV when the first row is concerned. If a variable is causing the other, a
“yes” is written along with its chi-square and p-value (p-values given in brackets which are
less than 0.005 are interpreted as significant). As a matter of fact, for the purpose of this
study, only the highlighted values are in our main interests. Other values can also be
interpreted in the same way to know if for example LGDP is causing LFDI or as follows.
The coefficient of determination R 2 and its adjusted coefficient are sufficiently high,
implying that approximately 83% (most honest value from adjusted R 2) of the total variation
in FDI flows in Mauritius is specified by the macro-economic determinants of FDI flows as
confirmed previously by the multiple regression. The Durbin-Watson test on the other hand
being close to 2 suggests that residuals are uncorrelated with their lagged values implying no
first-order serial correlation problem among the residuals.
As per the table above, it can be noted that the first differences of LFDI causes the variables
like LGDP, LINV, LOPEN and LRER (in their first differences) suggesting that the past