Capital Formation and Economic Growth in Mauritius

More documents

Recommendations

Info

Short-runLong-runCapital Formation and Economic Growth in Mauritius: Does FDI matter?ICITI 2012 ISSN: 16941225Table 12: long-run coefficients and short-run ECMRegressor Model 1 Model 2 Model 3Coefficient T-ratio Coefficient T-ratio Coefficient T-ratiorgdpc 1.0136 1.2680 0.61055 ** 2.3727 0.46745 0.86034pub -1.9893 * -1.7966 -0.2045 -1.2232 n.a n.apriv 0.74005 0.41965 n.a n.a -0.26300 -0.52364fdi1 n.a n.a -0.30512 ** -2.6144 -0.40839 * -1.6613trade 4.4586 * 1.7181 1.3084 *** 2.7564 1.7590 ** 2.3042tax -0.23056 -0.12620 0.3241 1.3521 n.a n.aconstant -30.2303 *** -3.3149 -10.5958 *** -3.1225 -10.0815 -1.4307∆rgdpc 0.64508 1.1723 0.28823 ** 2.2295 0.30077 0.89450∆priv 0.47101 0.41780 n.a n.a -0.16922 -0.54780∆pub -1.2661 * -1.9770 -0.096421 -1.3140 -0.40644 ** -2.5735∆fdi1 n.a n.a -0.14404 ** -2.5868 -0.26277 * -1.7340∆trade 2.8376 * 1.7812 0.6179 *** 3.4628 1.1318 ** 2.5433∆tax -0.14674 -0.12687 0.15220 1.2280 n.a n.aconstant -19.2400 *** -2.5971 -5.0021 *** -3.3287 -6.4868 -1.5700ecm t-1 -0.63645 *** -3.6854 -0.47208 *** -4.0341 -0.64344 *** -2.8674ModelsummaryARDL (1,0,0,0,0,0)R 2 = 0.66074F(6, 27) = 8.7641 *** ARDL (1,0,0,0,0,0)R 2 = .83304F(6, 27) = 22.4521 *** ARDL (2,0,0,0,0)R 2 = 0.48725F(6, 27) = 4.1179 ***Diagnostic Serial correlation: Serial correlation: Serial correlation:25
Capital Formation and Economic Growth in Mauritius: Does FDI matter?ICITI 2012 ISSN: 16941225tests F(1, 26) = 0.82833Functional Form:F(1, 26) = 0.0054376F(1, 26) = 0.010141Functional Form:F(1, 26) = 1.1261F(1, 26) = .081478Functional Form:F(1, 26) = 6.3159 **Note: * 10%, ** 5%, *** 1% and n.a not applicableLong-run positive accelerator effects are established for all three measures of capital formation,whereby a percentage increase in real average income contributes to the respective increase inFDI, private and public investment by 1.0136, 0.61055 and 0.46745 percents. And, short-runaccelerator effects stand at 0.64508, 0.28823, and 0.30077, respectively. However, significantaccelerator effects are only established for private capital formation, whereas for foreign andpublic capital formation the accelerator effects are weak both in size and significance.Analysing the impact of FDI on domestic fixed capital formation, vice-versa. First, crowding-outeffects are reported from FDI to private capital formation, where short- and long-run impactsstand at -0.14404 and -0.30512, respectively. From private investment to FDI, although evidenceof crowding-in is detected, the results are statistically weak or insignificant. Second, two-waycrowding-out is established between public investment and FDI. From FDI to public investmentthe elasticity coefficient is significantly negative at around -0.41 for both short- and long-run.And, the impact of public investment on FDI is significantly negative and more important -1.2661 (short-run) and -1.9893 (long-run).The nexus between domestic private and public capital formation for Mauritius conforms to thecrowding-out hypothesis. The results yield a two-way crowding out between the two variables ofaround -0.2, however, the coefficients are not statistically significant. Thus, weak crowding-outis established between private and public capital formation, vice-versa.26
Page 13: Capital Formation and Economic Grow
Page 16 and 17: Capital Formation and Economic Grow
Page 18 and 19: 1111.51212.5111111.511.5121212.512.
Page 46 and 47: 010 20 30 4050000100000 150000 2000

Capital Formation and Economic Growth in Mauritius

Create successful ePaper yourself

Delete template?

Save as template?