Page 15 - Azerbaijan State University of Economics

Aboubaker Khoualed, Taher Makhloufi, Ahmed Makhloufi, Elyas Luqman: The Impact
of Foreign Direct Investment (FDI) on Economic Development: The Case of Algeria

From Table (08), the critical value reached 17.62, higher than the upper value in
absolute terms at a 5% significance level, meaning we reject the null hypothesis and
accept the alternative hypothesis, indicating that the independent variable FDI is
exogenous .

Through the three Bound Test results within the Augmented ARDL framework, we
acknowledge the existence of a long-term equilibrium link between the variables FDI
and GDP using the FARDL model .

Results of Estimating Long-Term and Short-Term Parameters
From the outputs of the Unrestricted Error Correction Model (UECM) as follows:

Table 9: UECM Estimation Results
ARDL Long Run Form and Bounds Test
Dependent Variable: D(GDP)
Selected Model: ARDL(4, 2)
Case 2: Restricted Constant and No Trend
Date: 09/26/23 Time: 12:07
Sample: 1990 2022
Included observations: 29
Conditional Error Correction Regression
Variable Coefficient Std. Error t-Statistic Prob.
C 5.09E+09 6.56E+09 0.000000 0.0000
GDP(-1)* -0.283788 0.080049 -3.545169 0.0022
FDI(-1) 33.78141 8.046810 4.198112 0.0005
D(GDP(-1)) -0.247528 0.193030 -1.282334 0.2152
D(GDP(-2)) -0.631897 0.189197 -3.339895 0.0034
D(GDP(-3)) -0.285785 0.202407 -1.411932 0.1741
D(FDI) 15.56184 5.182985 3.002487 0.0073
D(FDI(-1)) -11.32589 6.092671 -1.858936 0.0786
COS(2*@PI*3.9099999... 1.32E+10 5.11E+09 0.000000 0.0000
SIN(2*@PI*3.90999999... -6.34E+09 4.24E+09 0.000000 0.0000

Source: Compiled by the researcher depending on: outputs of EViews 12.

The parameters can be separated for ease of economic interpretation as follows:
Long-Term Parameters:
The following table shows the results of the long-term estimation:

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