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Fettouche Fatma: Influence of Human Capital On Employment In China Standard
Analytical Study

ARDL Long-Run Specification and Bounds Testing
According to Pesaran, Shin, and Smith (2001), complementarity between study variables
implies that the Bounds test is appropriate for integration analysis because it can handle a
mixed integrated series to determine correlation among study variables over the short and
long term without requiring integration equations between the variables. If the statistical
value F surpasses the crucial upper limit I (1), the null hypothesis is rejected, despite the
alternative hypothesis H1 suggesting a complementarity between variables. We can
determine whether a shared complementarity exists, which suggests a sustained
relationship between the variables. So as to illustrate the long-Run connection, the (ECM)
may be approximated since the hypothesis of no integration is thus raised. We determine
that integration is absent, signifying the lack of a long-term link, if the statistical value F
is less than the essential minimum value I (0). the alternative hypothesis posits the absence
of common integration among the research variables is accepted based on the Bonds test
findings.
Table.6 Bounds Test Results
F-Bounds Test Null Hypothesis : No Level relationship
Value Signif. I(0) I(1)
Asymptotic:n=1000
F-Statistic 2.601863 10⸓ 2.08 3
K 5 5⸓ 2.39 3.38
2.5⸓ 2.7 3.73
1⸓ 3.06 4.15

We accept the alternative hypothesis that there is no common integration, meaning that a
long –Run partnership does not exit among human capital and the employment rate
(EMP), as demonstrated by the Bounds test results, which show F values below the
critical values of the I (1) limit. (ECM) is then run as indicated in the following table:
Table.7 Long Run and ECM Results
Long run estimation Short run estimation
Coefficient T-statistics Coefficient T-statistics
EDU 0.169499 0.312162 0.063591 0.7615
HEXP -0.330047 -1.183846 -0.123825 0.2367
INF 0.057776 0.676003 0.021676 0.4725
LEB -0.38800 -0.185702 -0.0114557 0.8559
LPR 0.131529 1.919819 0.049346 0.1179
C 2.588402 0.171177 0.791098 0.8667
ECT -0.375173 -4.792105
R-Squared 0.789096
F-Statistics 10.75679
Prob 0.000004

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