The nexus between export diversification, imports, capital and economic growth in the United Arab Emirates: An empirical investigation

Figures & data

Table 1. Descriptive Statistics

	LGDP	LPC	LHC	LED	LIMP
Mean	25.76604	24.40696	14.51950	1.525341	24.77783
Median	25.71515	24.27234	14.41867	1.485686	24.61736
Maximum	26.63922	25.23687	15.89657	1.821439	26.36672
Minimum	24.68396	23.66620	12.86302	1.295483	23.23637
Std. Dev.	0.558638	0.454637	0.932275	0.187360	0.973366
Skewness	0.008010	0.587847	0.146286	0.312860	0.402840
Kurtosis	1.805571	2.015047	1.814810	1.588613	1.751114
Jarque-Bera	2.556560	4.214699	2.670074	4.270509	3.957499
Probability	0.278516	0.121560	0.263148	0.118214	0.138242
Observations	43	43	43	43	43

Source: Author’s own elaboration

Figure 1. Graphical Plot of all the variables for the time period 1975-2017

Table 2. ADF UNIT ROOT TEST RESULTS AT LEVEL AND FIRST DIFFERENCE

Variables	Constant*	Constant and Trend*	Without Constant and trend*
LGDP	0.6544	0.4342	0.9999
$\mathrm{\Delta }$LGDP	0.0001	0.0010	0.0001
LPC	0.7901	0.8314	0.9838
$\mathrm{\Delta }$LPC	0.0000	0.0003	0.0000
LHC	0.8240	0.3916	0.9988
$\mathrm{\Delta }$LHC	0.0075	0.0323	0.05
LED	0.5434	0.7689	0.0883
$\mathrm{\Delta }$LED	0.0149	0.0446	0.0031
LIMP	0.9193	0.8197	1.0000
$\mathrm{\Delta }$LIMP	0.0001	0.0008	0.0001

* MacKinnon (1996) one-sided p-values.

Table 3. Johansen Co-integration Test Unrestricted Cointegration Rank Test—Trace

Cointegrating rank (r)	Eigen Value	Trace Statistic	Critical Value (5 percent level of significance)	P-value**
None *	0.873411	172.4454	69.81889	0.0000
At most 1 *	0.740469	93.90658	47.85613	0.0000
At most 2 *	0.513272	42.64922	29.79707	0.0010
At most 3	0.308230	15.28729	15.49471	0.0537
At most 4	0.033231	1.284243	3.841466	0.2571

Note: Trace test indicates three co-integrating equations. * denotes rejection of the null hypothesis (i.e., no co-integration) at 5 percent level of significance respectively. ** denotes MacKinnon-Haug-Michelis (1999) p-values.

Table 4. Vector Error Correction Estimates (Long–run)

Variables		Coefficients	Standard Errors	T-statistics
ECT*		−0.467779 (0.0001)**	(0.10146)	[4.61058]
$\mathrm{\Delta }$LPC		0.191181	(0.19552)	[0.97782]
$\mathrm{\Delta }$LHC		1.757563	(0.35429)	[4.96083]
$\mathrm{\Delta }$LED		3.219917	(0.57821)	[5.56880]
$\mathrm{\Delta }$LIMP		−1.56431	(0.34239)	[−4.83790]
C		−19.86473
$\mathrm{\Delta }$GDP		1
R-squared		0.65
Adjusted R-squared		0.40
F-statistic		2.636178
Prob(F-statistic)		0.018032
Durbin-Watson stat		2.582606
Residual Test
Jarque-Bera Test Statistic = 0.83	P-value 0.65
Heteroskedasticity Breusch Pagan Godfrey Test Statistic = 1.57	P-value = 0.16
Serial Correlation LM Test	P-value = 0.80

Dependent Variable: GDP

Lags = 3

Time period: 1979-2017

Observations: 39 after adjustments

* ECT refers to Error Correction Term

** Indicates P-value of the ECT

$\mathrm{\Delta }$ refers to variables in their first difference form.

Table 5. VECM Granger Causality Test Results

DEPENDENT VARIABLES
Independent Variables	ΔLGDP P-value	ΔLPC P-value	ΔLHC P-value	ΔLED P-value	ΔLIMP P-value
ΔLGDP	-	0.3810 (3.069640)	0.9694 (0.248370)	0.8069 (0.976812)	0.2306 (4.302749)
ΔLPC	0.1159 (5.912739)	-	0.4970 (2.382126)	0.3603 (3.210171)	0.2570 (4.042059)
ΔLHC	0.0050*** (12.82567)	0.2672 (3.947018)	-	0.1367 (5.533464)	0.1764 (4.938408)
ΔLED	0.2871 (3.772802)	0.7412 (1.249302)	0.3640 (3.184809)	-	0.6915 (1.460179)
ΔLIMP	0.0053*** (1.270670)	0.2713 (3.910441)	0.6109 (1.818585)	0.0225** (9.582240)	-
All Variables	0.0090 (26.53496)	0.5485 (19.77252)	0.8160 (7.593430)	0.1395 (17.27497)	0.1971 (15.87381)

Note: ***, **, * indicates significance at 1 percent, 5 percent, and 10 percent levels of significance. Degrees of freedom = 3. Optimal Lag Length suggested by the AIC Criterion has been followed for this test. Values in parentheses are Chi Square values. Δ indicates variables in first difference.

Table 6. Toda Yamamoto Granger Causality Test Results

DEPENDENT VARIABLES
INDEPEDENT VARIABLES	LGDP p-values	LPC p-values	LHC p-values	LED p-values	LIMP p-values	All Variables
LGDP	-	0.6305 (1.728866)	0.9162 (0.512074)	0.8394 (0.841840)	0.2637 (3.979257)	0.0139 (25.19516)
$\mathrm{L}$PC	0.4265 (2.781809)	-	0.8333 (0.867159)	0.1742 (4.967471)	0.5831 (1.948788)	0.2281 (15.24962)
LHC	0.1493 (5.328141)	0.4747 (2.503492)	-	0.0059*** (12.49274)	0.5256 (2.232392)	0.2474 (14.89165)
LED	0.0131** (10.76208)	0.5777 (1.974509)	0.0935* (6.404716)	-	0.4554 (2.611694)	0.00014 (31.91611)
LIMP	0.0031*** (13.87904)	0.2467 (4.140318)	0.2941 (3.713449)	0.7302 (1.295359)	-	0.2230 (15.34775)

Note: ***, **, * indicate significance at 1 percent, 5 percent and 10 percent levels of significance. Degrees of freedom = 3. Optimal Lag Length suggested by the AIC Criterion has been followed for this test. Order of integration (d) = 1 and Optimal Lag Length (k) = 3. Figures in the tables are p-values.

MacKinnon, J. G. (1996). Numerical distribution functions for unit root and cointegration tests. Journal of Applied Econometrics, 11(6), 601–618. https://doi.org/10.1002/(SICI)1099-1255(199611)11:6<601::AID-JAE417>3.0.CO;2-T

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MacKinnon, J. G., Haug, A. A., & Michelis, L. (1999). Numerical distribution functions of likelihood ratio tests for cointegration. Journal of Applied Econometrics, 14(5), 563–577

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