Empirical nexus between Chinese investment under China–Pakistan Economic Corridor and economic growth: An ARDL approach

Figures & data

Table 1. Summary statistics and variance inflation factor (VIF) test

Variables	Obs.	Mean	Median	Std. Dev.	Minimum	Maximum	VIF test
EG	40	0.128	0.127	0.094	0.009	0.306	….
CFDI	40	0.182	0.147	0.167	0.007	0.517	3.362
GDS	40	8.304	8.383	1.466	5.401	10.338	3.779
GE	40	0.205	0.202	0.010	0.191	0.221	2.813
INF	40	0.080	0.076	0.040	0.019	0.141	2.033

Table 2. Results of augmented Dickey–Fuller unit root test for all variables

	at level						at first difference
Variables	SIC Lag	t-values	1% level	5% level	10% level	I(d)	SIC Lag	t-values	1% level	5% level	10% level	I(d)
EG	1	−0.418	−2.626	−1.950	−1.612	Nil	1	−6.083	−2.627	−1.950	−1.611	I(1)
CFDI	1	−1.359	−2.627	−1.950	−1.611	Nil	1	−4.795	−2.629	−1.950	−1.611	I(1)
GDS	1	−1.138	−2.627	−1.950	−1.611	Nil	1	−3.648	−2.629	−1.950	−1.611	I(1)
GE	1	0.206	−2.627	−1.950	−1.611	Nil	1	−3.569	−2.629	−1.950	−1.611	I(1)
INF	1	−1.581	−2.627	−1.950	−1.611	Nil	1	−3.909	−2.629	−1.950	−1.611	I(1)

Table 3. Results of ARDL bound test

Dependent Variable	AIC Lags	F-statistic	Level of Significance				t-statistic	Level of Significance				Decision
			5%		1%			5%		1%
			I(0)	I(1)	I(0)	I(1)		I(0)	I(1)	I(0)	I(1)
FEG(EG\CFDI, GDS, GE, INF)	1	2.09	2.86	4.01	3.74	5.06	−2.73	−2.86	−3.99	−3.43	−4.6	no co-integration
FCFDI(CFDI\EG, GDS, GE, INF)	1	5.52	2.86	4.01	3.74	5.06	−4.88	−2.86	−3.99	−3.43	−4.6	cointegration
FGDS(GDS\EG, CFDI, GE, INF)	1	0.27	2.86	4.01	3.74	5.06	−0.11	−2.86	−3.99	−3.43 –3.43	−4.6	no co-integration
FGE(GE\EG, CFDI, GDS, INF)	1	2.81	2.86	4.01	3.74	5.06	−2.56	−2.86	−3.99		−4.6	no co-integration
FINF(INF\EG,CFDI,,GDS,GE)	1	2.54	2.86	4.01	3.74	5.06	1.64	−2.86	−3.99	−3.43	−4.6	no co-integration

Table 4. ARDL long-run relationship

Variable	Coefficient	Std. Error	t-Statistic	Prob.
C	−0.898	0.248	−3.612	0.001
CFDI(−1)	0.831	0.059	14.103	0.000
EG	0.200	0.074	2.694	0.011
GDS	0.018	0.008	2.185	0.036
GE	3.981	0.954	4.173	0.000
INF	−0.704	0.194	−3.629	0.001
R-Square	0.964
F-Statistic	175.574			0.000

Table 7. Results of short-run granger causality

Dependent variable	F-Statistics					$EC{T}_{t-1}$(t-statistics)	Direction of Causality
	D(EG)	D(CFDI)	D(GDS)	D(GE)	D(INF)
D(EG)	-	1.708	0.727	0.109	2.674*		INF→EG
D(CFDI)	4.219**	-	2.248	2.924*	1.154	−0.70(−2.73)**	EG→CFDI; GE→CFDI
D(GDS)	3.092*	4.251**	-	0.087	0.136		EG→GDS; CFDI→GDS
D(GE)	0.092	0.395	1.350	-	0.025		-
D(INF)	8.309***	5.417***	0.142	0.484	-		EG→INF; CFDI→INF

Note: ***, **, * represents significance at 1%, 5% and 10% respectively.

Table 5. Results of problem diagnostics

Tests	Statistics	Prob.
Jarque-Bera test of Normality	4.371	0.112
Breusch-Godfrey Serial Correlation LM Test	1.613	0.204
Heteroscadaticity Test: White	31.228	0.262
Chow Breakpoint Test: 2015	0.446	0.863

Figure 1. CUSUM and CUSUM of Square.