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lnEG, lnREX, lnINF, lnFDI and lnOPEN and observed the values of the t-statistics of the coefficient estimates calculated under the assumption that the true value of the coefficient equals zero as suggested by Granger and Newbold (1974).

Table 4.6: Results of Johansen co-integration test Likelihood

5% Critical

1% Critical

Hypothesized

Eigenvalue

Ratio

Value

Value

No. of CE(s)

0.799703

173.1208

68.52

76.07

None **

0.720678

112.0186

47.21

54.46

At most 1 **

0.600826

63.55379

29.68

35.65

At most 2 **

0.357209

28.65621

15.41

20.04

At most 3 **

0.268146

11.86263

3.76

6.65

At most 4 **

*(**) denotes rejection of the hypothesis at 5%(1%) significance level. L.R. test indicates 5 cointegrating equation(s) at 5% significance level

The study investigates the possible co-integrating relationship(s) between variables in economic growth function that was specified. Two or more variables are said to be cointegrated, i.e., they exhibit long-run equilibrium relationships, if they share common trends. The co-integration among variables rules out the possibility of the estimated relationships being “spurious�. The study adopts the Johansen test procedure for testing for co-integration relationship between economic growth and key determinants such as the exchange rate, inflation rate, ratio of FDI to GDP, and the trade liberalization. To accept the null hypothesis, the calculated test statistics must be smaller than their associated critical values. Based on the Eigen-value and Likelihood Ratio and their corresponding critical values, the null hypothesis of no co-integration between the economic growth and key determinants of 50

Profile for Abubakari Zakari

Impact Analysis of foreign Direct Investment on Economic Growth in Ghana  

FDI and economic growth in ghana

Impact Analysis of foreign Direct Investment on Economic Growth in Ghana  

FDI and economic growth in ghana

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