Determinants of private sector investment in a less developed country: a case of the Gambia

Figures & data

Figure 1. Trend in private investment.

Source: Generated by Author.

Table 1. Theoretical A-priori expectations

	RGDP	CRPS	EXD	GNE	INFR	REXR	RINT
PINV	+ve	+ve	-ve	+ve or -ve	-ve	+ve or -ve	-ve or +ve

Table 2. Unit root test (level and first difference)

Variable	ADF	1% CV	5% CV	Prob.	I(p)
CPRS	−6.1719	−3.6394	−2.9511	0.0000	I(0)
EXD	−5.4293	−3.621	−2.9434	0.0000	I(0)
GNE	−2.8331	−3.6537	−2.9571	0.0649	NS
D(GNE)	−8.4441	−3.6617	−2.9604	0.0000	I(1)
INFR	−3.3109	−3.621	−2.9434	0.0215	I(0)
PINV	−0.9993	−3.6892	−2.9719	0.7394	NS
D(PINV)	−2.9432	−3.6892	−2.9719	0.0531	I(1)
REXR	−1.1497	−3.6268	−2.9458	0.6851	NS
D(REXR)	−6.5111	−3.6268	−2.9458	0.0000	I(1)
RGDP	1.42333	−3.621	−2.9434	0.9987	NS
D(RGDP)	−7.3858	−3.6268	−2.9458	0.0000	I(1)
RINT	−4.9206	−3.6793	−2.9678	0.0004	I(0)

Table 3. ARDL Bound Cointegration Test

ARDL Bounds Test
H0: No long-run relationships exist
Test Statistic	Value	K
F-statistic	5.1311	7
Critical Value Bounds
Significance	I0 Bound	I1 Bound
10%	2.03	3.13
5%	2.32	3.5
2.50%	2.6	3.84
1%	2.96	4.26

Table 4. Results of the Short-Run ARDL (1, 2, 0, 3, 1, 1, 2, 1) model of private investment in the Gambia

Cointegrating Equation
Variable	Coefficient	Std. Error	t-Statistic	Prob.
D(RGDP)	2.91E+00	6.54E+00	0.4447	0.663
D(RGDP(−1))	1.08E+01	7.05E+00	1.5343	0.145
D(REXR)	−2.36E+07	8.22E+06	0.0000	0.000
D(RINT)	3.10E+07	1.41E+07	0.0000	0.000
D(RINT(−1))	−1.71E+07	1.51E+07	0.0000	0.000
D(RINT(−2))	−2.37E+07	1.10E+07	0.0000	0.000
D(INFR)	−4.78E+07	4.19E+07	0.0000	0.000
D(CRPS)	2.05E+07	2.33E+07	0.0000	0.000
D(EXD)	4.56E+07	1.24E+08	0.0000	0.000
D(EXD(−1))	3.05E+08	1.34E+08	0.0000	0.000
D(GNE)	1.67E+07	6.41E+07	0.0000	0.000
CointEq(−1)	−1.085383	2.54E-01	−4.2788	0.001
R-squared	0.86144		F-statistic	5.52631
Adjusted R-squared	0.70556		Prob(F-statistic)	0.00062

Table 5. Results of the long-run ARDL (1, 2, 0, 3, 1, 1, 2, 1) model of private investment in the Gambia

Long Run Coefficients
Variable	Coefficient	Std. Error	t-Statistic	Prob.
RGDP	−5.09E+00	2.06E+00	−2.46997	0.0251*
REXR	−2.17E+07	8.50E+06	−2.55641	0.0211*
RINT	9.89E+07	2.40E+07	4.111739	0.0008*
INFR	4.42E+07	3.03E+07	1.458147	0.1641
CPRS	8.30E+07	4.38E+07	1.895119	0.0763**
EXD	−1.43E+08	2.24E+08	−0.63643	0.5335
GNE	1.81E+08	4.14E+07	4.378071	0.0005*
C	−1.48E+10	6.07E+09	−2.44171	0.0266*

*Significant at 5%; **Significant at 10%