Effect of Import and Exchange Rate On FDI: Evidence of Asian Countries

Effect of Import and Exchange rate on FDI: Evidence of Asian Countries
Mehwish Aqeel 8403

mehwishaqeel@ymail.com
Ayaz Ahmed Farooqi 6097
mr_ayaz@hotmail.com
Muhammad Mazher Uddin Akhter 7164
mazher.moiz@gmail.com


2
Executive summary
We investigate the relationships among foreign direct investment, import and the real
exchange rate of Pakistan and three other Asian countries. Time series data (1961 -
2010) is taken to estimate the model by running OLS. For pooled data (1982 - 2012) of
India, Bangladesh and China is taken to estimate the model for these countries via POLS.
Result shows that both the model OLS and POLS shows that FX has negative impact on FDI
whereas import has positive impact. It is suggested that for in depth study more variables
is added to the model such as export, exchange rate policy and inflation for further
investigation.
Keywords: FDI , Agio, I mport


3
1. Foreword
Foreign direct investment is the direct venture of the individuals or company of another
country to target country. FDI is characterized as the net inflows of investments (inflow
minus outflow) to gain a stable administration interest toward an undertaking working in
an economy other than that of the investor.
1
Researchers concluded that FDI has positive impact on any economy due to the diffusion
of resources of another country like technology, scare raw material, capital, managerial
skills and knowledge and so forth. In short FDI is an important source of gaining foreign
capital. So the host country must give leverage in terms of low entry barrier, relaxing in
government control low tax rate so that it attracts the foreign investor. Coming to FDI
system in Pakistan, Pakistan established itself since last decade to attract the foreign
investors by establishing the regulatory framework for foreign investment consists of
three laws: Foreign Private Investment (Promotion & Protection) Act 1976, Furtherance
and Protection of Economic Reforms Act 1992 and Foreign Currency Accounts
(Protection) Ordinance 2001.
2
When any country dealing with FDI there is the change of currency take place. So the
rate at which one currency will be exchanged for another is known as Foreign exchange
rate, also known as FX, Agio or Forex rate
3
. It is easily understandable when FDI
increases FX play an important role to increase it, keeping other factors constant.
Other than impact of FX on FDI, import is also there because when any country come to
perform its operations into the target country its came up with its resources and as per
need basis continuously bring the resources. More precisely target countrys import
increases. In other words, an import is a good brought into a jurisdiction, especially
across a national border, from an external source.
4

4
Summarizing all the factors we can say that our equation of consideration could be like
this:
FDI (f) = FX + Imports
Where,
FDI = Foreign direct investments
FX = Foreign exchange rates
IMPT = Imports
This model is generated as per general information for checking its validity we will run
OLS and for further confirmation we will take other countries and perform the same
operation for the reliability and validity of the model.
For simple OLS we will work on secondary data of fifty years (1961 2010) and for
China, India and Bangladesh we will take 30 years data (1982 2012) by applying
POLS. For the effectiveness of data and model we will run Stationary analysis,
Cointegration for long run relationship, Stability analysis for checking that either OLS is
applicable not, Causality analysis. Other than that we will introduce dummy variable to
check the impact of FDI in regimes of Pakistan and for mean computation t- test and
ANNOVA will be use.

1. http://en.wikipedia.org/wiki/Foreign_direct_investment
2. http://www.scribd.com/doc/28495791/FDI-in-Pakistan
3. http://en.wikipedia.org/wiki/Exchange_rate
4. http://en.wikipedia.org/wiki/Import


5
2. Review of literatures
2.1. Theoretical background
According to the proposition of the economy FDI, Imports and FX are directly linked. It is
easily understandable that if foreigners came to invest in any country then they will bring
goods in the jurisdiction (i.e. import) and automatically some cost occurred in this
transaction. Since countries are different than it is the oblivious fact that both country (host
and target) having different currencies and yet exchange of different currencies held with
some particular criteria and standards (i.e. foreign exchange). Therefore we will see this
theoretical evidence in our econometric model.
2.2. Empirical studies
Different researchers present their views about FDI by taking other important variables along
with FX and imports. In perspective of our country, Rehman, Jaffri and Ahmed (2010)
identify the impact of foreign exchange inflows on equilibrium real exchange rate of Pakistan
for the period 1993 (M7) to 2009 (M3) through behavioral equilibrium real exchange rate
(BEER) approach. Foreign Direct Investment (FDI), Behavioral Equilibrium Real Exchange
Rate (BEER), Real Exchange Rate Misalignment (RERM), Equilibrium Real Exchange Rate
(ERER), GDP, and Fiscal Year are used as variables whereas Augmented Dickey-Fuller
(ADF) tests and regression is used. Results shows that massive foreign direct investment
inflows and workers remittances have significantly appreciated equilibrium real exchange
rate of Pakistan. It is suggested that future research in this direction should explore variation
in results based on different estimation techniques of equilibrium exchange rate.
Also, Busseand Hefeker (2005) identifies the linkages between political risk, institutions and
foreign direct investment inflows by using the data of 83developing countries and the period
1984 to 2003. Using FDI as dependent variable whereas Import, Export, GNI, GNP,

6
Government stability, Socio-economic, Investment profile, Political violence, Level of
corruption, Military in politics, Religious tensions, Law and order, Ethnic, Democratic
accountability and Bureaucracy as independent variables. Correlation Matrix, Cross-Country
Analysis, Panel Analysis, Arellano-Bond Dynamic Panel-Data Estimation and OLS
regression were used. Results shows that the identified indicators that matter most for the
activities of multinational corporations. It is suggested that for future investigation the main
contribution is about provocative policy by taking several alternative hypotheses about the
relative influence of factors like risk premiums and institutions in different countries.
Whereas, Tobin and Ackerman (2005) explore the objectives and possible consequences of
Bilateral Investment Treaties (BIT)on FDI by using the data of 176 countries from 1984 to
2000.Using FDI as dependent variable whereas Exchange rate, Inflation, Trade, Conflict,
Growth, GDP and Population as independent variables. Bilateral Regressions model is used.
Results show weak relationship between BITs and FDI. Further, BITs only have a positive
effect on FDI flows in countries with an already stable business environment. Overall, BITs
seem to have little positive effect either on foreign investment or on outside investors
perception of the investment environment in low- and middle-income countries. It is
suggested that to determine if differences in the content of BITs affect the overall business
environment beyond that, go further and study some of the negative implications as well.
While, Carkovic and Levine (2002) identify the reassess the relationship between economic
growth and FDI by using the data of 72 countries over the period 1960-95. Using FDI as
dependent variable whereas exchange rate volatility, Openness to trade ((Exports +
Imports)/GDP), Black market premium, Growth rate, Inflation and Government size as
independent variables. Dynamic Panel Model and OLS Regression are used. Results show
that the exogenous component of FDI does not exert a robust, independent influence on

7
growth. It is suggested that for future investigation other growth determinants must be
consider.
Also, Xing and Wang (2005) identify the role of exchange rate in the competition for FDI by
using the data of Japanese FDI in nine Asian manufacturing sectors from 1981 to 2002. FDI
is used as dependent variable whereas Exchange rate, CHINA, ASIAN4- (Indonesia,
Malaysia, Thailand and Philippines) and Trade as independent variables. Cobb Douglas
production function and pooled regression model is used. Results shows that if the currency
of one FDIs recipient country appreciates against the currency of sourcing country more than
that of its rival, its FDI inflow will decrease whiles the FDI flowing of the competing country
will increase. It is suggested that future investigation must based on machinery sector because
there is a question mark of FDI and exchange rate on this sector.
Last but not the least, Goldberg and Klein (1998) identify the relationships among trade,
foreign direct investment and the real exchange rate between a set of South East Asia and
Latin American countries and both the United States and Japan by using the data quantitative
data between 1979 to 1995 (for Japan), 1978 to 1993 (for US), 1979 to 1995 (for Latin
America) and 1979 to 1995 (for South East Asia). FDI, Trade and Real Exchange Rates are
the variables and Regression has been applied. Results show two types of linkages between
Latin American and South East Asian countries with the United States and Japan: (i) the link
between the real exchange rate and direct investment; and (ii) the link between the real
exchange rate and trade. It is suggested that an open question arises which need to be answer
about the concerns and the role of the performance of countries in diverting trade and
investment.


8
3. Methodology
By checking the relationship among variables we plot the graph of our raw data.

Since we noticed that FDI has direct relationship with FX and imports, we are now testing
this scientific theory into mathematical context by taking data of Pakistan since 1961 2010.
In accordance with the empirical studies, our equation of foreign direct investment (FDI) by
taking Foreign exchange rate (FX) and imports (impt) could be something like this:
FDI = +
1
(FX) +
2
(IMPT) + e
In equation, FDI represents the dependent variable, alpha is the value of some constant, Beta
1 is the value of our first independent variable which has positive relationship by keeping
other factors constant, Beta 2 is the value of our second independent variable which has
positive relationship by keeping other factors constant, and e is the error of the model.
5000.00
0.00
5000.00
10000.00
15000.00
20000.00
25000.00
30000.00
35000.00
40000.00
45000.00
1
9
6
1
1
9
6
4
1
9
6
7
1
9
7
0
1
9
7
3
1
9
7
6
1
9
7
9
1
9
8
2
1
9
8
5
1
9
8
8
1
9
9
1
1
9
9
4
1
9
9
7
2
0
0
0
2
0
0
3
2
0
0
6
2
0
0
9
V
a
l
u
e

Years
FX
Impt
FDI

9
Therefore we will now proceeds to apply some techniques to proof our equation.
4. Data evaluation
For checking the relationship of our model, we have done series of analysis. The stability
analysis shows that our data is stationary.
t-Statistic Prob.*

Augmented Dickey-Fuller test statistic -3.996564 0.0031
Test critical values: 1% level -3.574446
5% level -2.923780
10% level -2.599925

Also with the help of our model we can find long term relationship.
Unrestricted Cointegration Rank Test (Trace)

Hypothesized Trace 0.05
No. of CE(s) Eigenvalue Statistic Critical Value Prob.**

None * 0.757799 73.50032 35.01090 0.0000
At most 1 0.099580 5.436944 18.39771 0.9092
At most 2 0.008341 0.402027 3.841466 0.5260

Unrestricted Cointegration Rank Test (Maximum Eigenvalue)

Hypothesized Max-Eigen 0.05

None * 0.757799 68.06338 24.25202 0.0000
At most 1 0.099580 5.034917 17.14769 0.9000
At most 2 0.008341 0.402027 3.841466 0.5260

And our data is stable so we can run OLS.
Chow Breakpoint Test: 1982
Null Hypothesis: No breaks at specified breakpoints
Varying regressors: All equation variables
Equation Sample: 1961 2010

F-statistic 1.729465 Prob. F(3,44) 0.1748


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5. Outcome of evaluation
By applying OLS it is shown that all the independent variables IMPT (Imports in dollar) and
FX (Foreign exchange rate), which predicts the dependent variable which is FDI (Foreign
direct investment). Also, Import has positive relationship with FDI and FX has negative
with FDI. Therefore the model is,
FDI = - +
1
(IMPORT) -
2
(FX) + e
FDI = -245.4436 + 0.149215 (IMPORT) - 12.72319 (FX) + e
By applying POLS we get,
FDI = +
1
(IMPORT) -
2
(FX) + e
FDI = 1.83E+09 + 0.132540 (IMPORT) - 98263858 (FX) + e
6. Epilogue and policy implication
Both the model OLS and POLS shows that FX has negative impact on FDI whereas import
has positive impact. It is suggested that for in depth study more variables is added to the
model such as export, exchange rate policy and inflation for further investigati on.

11
7. Reference
Carkovic, M., & Levine, R. (2002). Does foreign direct investment accelerate economic
growth?. U of Minnesota Department of Finance Working Paper.
Jaffri, A. A., & Ahmed, I. (2010). Impact of Foreign Direct Investment (FDI) Inflows on
Equilibrium Real Exchange Rate of Pakistan. South Asian Studies (1026-678X), 25(1).
Tobin, J., & Rose-Ackerman, S. (2003). Foreign direct investment and the business
environment in developing countries: The impact of bilateral investment treaties.
Goldberg, L. S., & Klein, M. W. (1997). Foreign Direct Investment, Trade and Real
Exchange Rate Linkages in Developing Countries (No. w6344). National Bureau of
Economic Research.
Busse, M., & Hefeker, C. (2007). Political risk, institutions and foreign direct investment.
European journal of political economy, 23(2), 397-415. Chicago
Xing, Y., & Wan, G. (2006). Exchange rates and competition for FDI in Asia. The World
Economy, 29(4), 419-434.


12
0
10,000
20,000
30,000
40,000
50,000
65 70 75 80 85 90 95 00 05 10
IMPT
0
10
20
30
40
50
60
70
80
90
65 70 75 80 85 90 95 00 05 10
FX
-1,000
0
1,000
2,000
3,000
4,000
5,000
6,000
65 70 75 80 85 90 95 00 05 10
FDI
8. Appendix
8.1. Stationary analysis: FDI, FX and Impt


13
FDI at level, intercept: I (o) C
Null Hypothesis: FDI has a unit root
Exogenous: Constant
Lag Length: 1 (Automatic based on AIC, MAXLAG=1)

t-Statistic Prob.*

5% level -2.923780
10% level -2.599925

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

Augmented Dickey-Fuller Test Equation
Dependent Variable: D(FDI)
Method: Least Squares
Date: 04/10/14 Time: 15:17
Sample (adjusted): 1963 2010
Included observations: 48 after adjustments

Variable Coefficient Std. Error t-Statistic Prob.

FDI(-1) -0.189310 0.047368 -3.996564 0.0002
D(FDI(-1)) 0.827089 0.124802 6.627231 0.0000
C 94.20965 60.14934 1.566262 0.1243

R-squared 0.509602 Mean dependent var 45.90417
Adjusted R-squared 0.487807 S.D. dependent var 524.3420
S.E. of regression 375.2595 Akaike info criterion 14.75357
Sum squared resid 6336885. Schwarz criterion 14.87052
Log likelihood -351.0858 Hannan-Quinn criter. 14.79777
F-statistic 23.38110 Durbin-Watson stat 1.714101
Prob(F-statistic) 0.000000

I nterpretation:
Our claim is H
o
data is not stationary (if p is greater than 0.1) in our result Prob value is
0.0031, which means Ho rejected.

14
FDI at level, trend and intercept: I (o) C and T
Null Hypothesis: FDI has a unit root
Exogenous: Constant, Linear Trend

t-Statistic Prob.*

5% level -3.506374
10% level -3.183002


Dependent Variable: D(FDI)
Date: 04/10/14 Time: 15:17


FDI(-1) -0.279045 0.056205 -4.964810 0.0000
D(FDI(-1)) 0.839116 0.117481 7.142558 0.0000
C -169.8837 115.6174 -1.469361 0.1488
@TREND(1961) 12.40794 4.737228 2.619241 0.0120


I nterpretation:
Our claim is H
o

15
FDI at first difference, intercept: I (1) C
Null Hypothesis: D(FDI) has a unit root
Exogenous: Constant

t-Statistic Prob.*

5% level -2.925169
10% level -2.600658


Dependent Variable: D(FDI,2)
Date: 04/10/14 Time: 15:17


D(FDI(-1)) -0.784280 0.147581 -5.314247 0.0000
D(FDI(-1),2) 0.685730 0.151809 4.517060 0.0000
C 54.50163 55.53685 0.981360 0.3318

R-squared 0.407836 Mean dependent var -32.15532

I nterpretation:
Our claim is H
o


16
FDI at first difference, trend and intercept: I (1) C and T
Null Hypothesis: D(FDI) has a unit root

t-Statistic Prob.*

5% level -3.508508
10% level -3.184230


Dependent Variable: D(FDI,2)
Date: 04/10/14 Time: 15:18


D(FDI(-1)) -0.866071 0.159552 -5.428132 0.0000
D(FDI(-1),2) 0.764790 0.162607 4.703313 0.0000
C -80.52073 118.1086 -0.681752 0.4991
@TREND(1961) 5.551177 4.294612 1.292591 0.2031


I nterpretation:
Our claim is Ho data is not stationary (if p is greater than 0.1) in our result Prob value is
Combine reporting on FDI: Since there is no trend in level and 1st difference as well which
means we can run OLS in our data.


17
FX at level, intercept: I (o) C
Null Hypothesis: FX has a unit root
Exogenous: Constant

t-Statistic Prob.*

Augmented Dickey-Fuller test statistic 2.152002 0.9999
5% level -2.923780
10% level -2.599925


Dependent Variable: D(FX)
Date: 04/10/14 Time: 15:22


FX(-1) 0.037896 0.017610 2.152002 0.0368
D(FX(-1)) 0.455296 0.162081 2.809063 0.0073
C 0.070384 0.489363 0.143827 0.8863

Sum squared resid 218.5893 Schwarz criterion 4.595821

I nterpretation:
Our claim is H
o
0.9999, which means Ho accepted.


18
FX at level, trend and intercept: I (o) C and T
Null Hypothesis: FX has a unit root

t-Statistic Prob.*

5% level -3.506374
10% level -3.183002


Dependent Variable: D(FX)
Date: 04/10/14 Time: 15:22


FX(-1) -0.005158 0.040932 -0.126015 0.9003
D(FX(-1)) 0.445114 0.161682 2.753026 0.0085
C -0.666727 0.799060 -0.834389 0.4086
@TREND(1961) 0.069997 0.060126 1.164170 0.2506


I nterpretation:
Our claim is H
o


19
FX at first difference, intercept: I (1) C
Null Hypothesis: D(FX) has a unit root
Exogenous: Constant

t-Statistic Prob.*

5% level -2.923780
10% level -2.599925


Dependent Variable: D(FX,2)
Date: 04/10/14 Time: 15:22


D(FX(-1)) -0.377847 0.147844 -2.555723 0.0140
C 0.752202 0.387395 1.941692 0.0583


I nterpretation:
Our claim is H
o


20
To remove trend at first difference taking log
Null Hypothesis: D(LFX) has a unit root

t-Statistic Prob.*

5% level -3.506374
10% level -3.183002


Dependent Variable: D(LFX,2)
Date: 04/10/14 Time: 15:30


D(LFX(-1)) -0.819640 0.147239 -5.566721 0.0000
C 0.030237 0.030276 0.998696 0.3233
@TREND(1961) 0.000740 0.001034 0.715601 0.4779

S.E. of regression 0.098602 Akaike info criterion -1.734994
Sum squared resid 0.437504 Schwarz criterion -1.618044
Log likelihood 44.63987 Hannan-Quinn criter. -1.690799

I nterpretation:
Our claim is H
o

21
FX at first difference, trend and intercept: I (1) C and T
Null Hypothesis: D(FX) has a unit root

t-Statistic Prob.*

5% level -3.506374
10% level -3.183002


Dependent Variable: D(FX,2)
Date: 04/10/14 Time: 15:23


D(FX(-1)) -0.558060 0.157951 -3.533126 0.0010
C -0.611678 0.661723 -0.924372 0.3602
@TREND(1961) 0.063151 0.025483 2.478184 0.0170


I nterpretation:
Our claim is H
o
Combine reporting on FX: Since there is trend in level but no trend on 1st difference which
means we can run OLS in our data.


22
I mpt at level, intercept: I (o) C
Null Hypothesis: IMPT has a unit root
Exogenous: Constant

t-Statistic Prob.*

5% level -2.922449
10% level -2.599224


Dependent Variable: D(IMPT)
Date: 04/10/14 Time: 15:36


IMPT(-1) 0.072982 0.036829 1.981671 0.0534
C 165.7700 401.2541 0.413130 0.6814

Sum squared resid 2.03E+08 Schwarz criterion 18.23537

I nterpretation:
Our claim is H
o

23
I mpt at level, trend and intercept: I (o) C and T
Null Hypothesis: IMPT has a unit root

t-Statistic Prob.*

5% level -3.504330
10% level -3.181826


Dependent Variable: D(IMPT)
Date: 04/10/14 Time: 15:37


IMPT(-1) 0.004119 0.063405 0.064959 0.9485
C -531.7920 658.7844 -0.807232 0.4237
@TREND(1961) 48.06964 36.17484 1.328814 0.1905


I nterpretation:
Our claim is H
o


24
I mpt at first difference, intercept: I (1) C
Null Hypothesis: D(IMPT) has a unit root
Exogenous: Constant

t-Statistic Prob.*

5% level -2.925169
10% level -2.600658


Dependent Variable: D(IMPT,2)
Date: 04/10/14 Time: 15:37


D(IMPT(-1)) -0.322442 0.182005 -1.771611 0.0834
D(IMPT(-1),2) -0.928993 0.207605 -4.474810 0.0001
C 343.7946 297.2479 1.156592 0.2537


I nterpretation:
Our claim is H
o


25
Null Hypothesis: D(LIMPT) has a unit root
Exogenous: Constant

t-Statistic Prob.*

5% level -2.923780
10% level -2.599925


Dependent Variable: D(LIMPT,2)
Date: 04/10/14 Time: 15:40


D(LIMPT(-1)) -0.863606 0.147123 -5.869973 0.0000
C 0.069962 0.028763 2.432326 0.0190


I nterpretation:
Our claim is H
o

26
I mpt at first difference, trend and intercept: I (1) C and T
Null Hypothesis: D(IMPT) has a unit root

t-Statistic Prob.*

5% level -3.508508
10% level -3.184230


Dependent Variable: D(IMPT,2)
Date: 04/10/14 Time: 15:38


D(IMPT(-1)) -0.484565 0.208409 -2.325061 0.0249
D(IMPT(-1),2) -0.852055 0.210656 -4.044775 0.0002
C -447.5609 595.4318 -0.751658 0.4564
@TREND(1961) 35.06630 22.97274 1.526431 0.1342


I nterpretation:
Our claim is H
o


27
Null Hypothesis: D(LIMPT) has a unit root

t-Statistic Prob.*

5% level -3.506374
10% level -3.183002


Dependent Variable: D(LIMPT,2)
Date: 04/10/14 Time: 15:40


D(LIMPT(-1)) -0.865228 0.148856 -5.812520 0.0000
C 0.059758 0.055090 1.084739 0.2838
@TREND(1961) 0.000406 0.001862 0.218029 0.8284


I nterpretation:
Our claim is H
o
Combine reporting on Impt: Since there is trend in level and no trend at 1st difference
(after taking log) which means we can run OLS in our data.

28
8.2. Cointegration
J.J Test summary
Date: 04/10/14 Time: 17:21
Sample: 1961 2010
Included observations: 48
Series: FDI FX IMPT
Lags interval: 1 to 1

Selected
(0.05 level*)
Number of
Cointegrating
Relations by
Model

Data Trend: None None Linear Linear Quadratic
Test Type No Intercept Intercept Intercept Intercept Intercept
No Trend No Trend No Trend Trend Trend
Trace 3 2 3 1 1
Max-Eig 3 2 3 1 1

*Critical values based on MacKinnon-Haug-Michelis (1999)

Information
Criteria by
Rank and
Model

Data Trend: None None Linear Linear Quadratic
Rank or No Intercept Intercept Intercept Intercept Intercept
No. of CEs No Trend No Trend No Trend Trend Trend

Log
Likelihood by
Rank (rows)
and Model
(columns)
0 -870.1189 -870.1189 -866.1911 -866.1911 -857.0904
1 -838.7790 -836.7702 -833.9654 -829.7631 -823.0588
2 -829.0958 -826.7256 -826.6387 -822.4075 -820.5413
3 -826.9962 -824.5721 -824.5721 -820.3403 -820.3403

Akaike
Information
Criteria by
Rank (rows)
and Model
(columns)
0 36.62996 36.62996 36.59130 36.59130 36.33710
1 35.57413 35.53209 35.49856 35.36513 35.16911*
2 35.42066 35.40523 35.44328 35.35031 35.31422
3 35.58318 35.60717 35.60717 35.55584 35.55584

Schwarz
Criteria by
Rank (rows)
and Model
(columns)

29
0 36.98081 36.98081 37.05910 37.05910 36.92185
1 36.15888 36.15582 36.20026 36.10581 35.98777*
2 36.23931 36.30185 36.37888 36.36388 36.36677
3 36.63573 36.77667 36.77667 36.84230 36.84230

I nterpretation:
Select the * item (for lag and option), since Akai and Eigen shows same lag and option
(i.e. lag 1 and option 5) again run test.
Date: 04/10/14 Time: 17:27
Trend assumption: Quadratic deterministic trend
Series: FDI FX IMPT
Lags interval (in first differences): 1 to 1

Unrestricted Cointegration Rank Test (Trace)

Hypothesized Trace 0.05

None * 0.757799 73.50032 35.01090 0.0000
At most 1 0.099580 5.436944 18.39771 0.9092
At most 2 0.008341 0.402027 3.841466 0.5260

Trace test indicates 1 cointegratingeqn(s) at the 0.05 level
* denotes rejection of the hypothesis at the 0.05 level
**MacKinnon-Haug-Michelis (1999) p-values

Unrestricted Cointegration Rank Test (Maximum Eigenvalue)

Hypothesized Max-Eigen 0.05

None * 0.757799 68.06338 24.25202 0.0000
At most 1 0.099580 5.034917 17.14769 0.9000
At most 2 0.008341 0.402027 3.841466 0.5260

Max-eigenvalue test indicates 1 cointegratingeqn(s) at the 0.05 level
* denotes rejection of the hypothesis at the 0.05 level
**MacKinnon-Haug-Michelis (1999) p-values

Unrestricted Cointegrating Coefficients (normalized by b'*S11*b=I):

FDI FX IMPT
-0.002586 0.031783 0.000246
-0.001740 -0.133685 0.000526
0.004106 -0.047360 -0.001119

Unrestricted Adjustment Coefficients (alpha):

D(FDI) 308.5408 -55.06945 -11.58899
D(FX) -0.954048 0.225759 -0.115089
D(IMPT) -751.8787 -272.6391 -45.58613


30

1 Cointegrating Equation(s): Log likelihood -823.0588

Normalized cointegrating coefficients (standard error in parentheses)
FDI FX IMPT
1.000000 -12.29033 -0.094960
(4.89438) (0.01384)

Adjustment coefficients (standard error in parentheses)
D(FDI) -0.797892
(0.11071)
D(FX) 0.002467
(0.00062)
D(IMPT) 1.944373
(0.43278)

2 Cointegrating Equation(s): Log likelihood -820.5413

Normalized cointegrating coefficients (standard error in parentheses)
FDI FX IMPT
1.000000 0.000000 -0.123563
(0.01815)
0.000000 1.000000 -0.002327
(0.00117)

Adjustment coefficients (standard error in parentheses)
D(FDI) -0.702074 17.16830
(0.13079) (5.76590)
D(FX) 0.002074 -0.060503
(0.00074) (0.03243)
D(IMPT) 2.418754 12.55071
(0.50487) (22.2577)

I nterpretation:
Our claim is Ho no Cointegration (if p greater than 0.05) therefore in result Trace and
Eigenvalue (both having p value 0.000 which means Ho rejected) shows significant result
which means from given data we can find long term relationship (i.e., throughout the sample
period) and we dont need to use Adoc.


31
-0.4
-0.2
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1975 1980 1985 1990 1995 2000 2005 2010
CUSUM of Squares 5% Significance
-20
-15
-10
-5
0
5
10
15
20
1975 1980 1985 1990 1995 2000 2005 2010
CUSUM 5% Significance
8.3. Stability analysis
Cusum Cusumq

I nterpretation:
Since the graph of Cusum and Cusumq are varying in display therefore we took 1982 or 2008
and run Chow break point.
Chow Breakpoint Test: 1982
Null Hypothesis: No breaks at specified breakpoints
Varying regressors: All equation variables
Equation Sample: 1961 2010

Log likelihood ratio 5.573404 Prob. Chi-Square(3) 0.1343
Wald Statistic 5.188394 Prob. Chi-Square(3) 0.1585

I nterpretation: H
o
: Coefficients are not different.
Since Prob.F is greater than 0.1, Ho accepted. Therefore we can say that our data is stable and
we could apply OLS.

32
8.4. Causality analysis
Pairwise Granger Causality Tests
Date: 04/23/14 Time: 11:36
Sample: 1961 2010
Lags: 1

Null Hypothesis: Obs F-Statistic Prob.

FX does not Granger Cause FDI 49 4.03944 0.0503
FDI does not Granger Cause FX 2.69621 0.1074

IMPT does not Granger Cause FDI 49 0.63894 0.4282
FDI does not Granger Cause IMPT 29.6368 2.E-06

IMPT does not Granger Cause FX 49 17.4604 0.0001
FX does not Granger Cause IMPT 2.28138 0.1378

I nterpretation: H
0
= no causal relationship (p > 0.1)
In our analysis test result shows:
FDI and FX have unidirectional causal relationship, which means FDI has no causal
relationship with FX.
IMPT and FDI have unidirectional relationship, which means IMPT has no causal
relationship with FDI.
IMPT and FX have unidirectional relationship, which means FX has no causal relationship
with IMPT.


33
8.5. OLS
Result of equation
Dependent Variable: FDI
Date: 03/18/14 Time: 11:56
Sample: 2003 2012


C 7.83E+09 4.41E+09 1.773807 0.1194
IMPORT 0.868629 1.650525 0.526274 0.6150
FX -87494418 78790535 -1.110469 0.3035

R-squared 0.178990 Mean dependent var 2.57E+09
Adjusted R-squared -0.055584 S.D. dependent var 1.87E+09
S.E. of regression 1.92E+09 Akaike info criterion 45.83557

I nterpretation:
Variable column shows all the independent variables IMPORT (Imports in dollar) and FX
(Foreign exchange rate), which predicts the dependent variable which is FDI (Foreign
direct investment).
Coefficient:
Coefficient sign shows relationship between dependent and independent variables. Here
Import has positive relationship with FDI and FX has negative with FDI. According to the
equation FDI = + 1 (IMPORT) - 2 (FX) , if X
1
Increase by one unit the dependent
variable will increase times other things remain same and if X
2
decrease by one unit
dependent variable will increase times other things remain same.
Prob:
Prob Value tells Chances of Errors. So this shows that all the Independent variables have
insignificant relationship with FDI. The chances of errors are maximize so we can not reject
the H
0
, therefore H
A
accepted.

34
T-Statistic:
T-Statistic is inversely proportion of Prob (T-Statistic 1 / Prob). Its means that if t-statistic
increases the value of prob will decreases, if its decreases the prob value will increase.
R square:
R
2
tell us that how much percent the independent variables predict the dependent variable.
Here Import and FX predict the FDI at 17% which is very weak.
Adjusted R2:
(R2 + Degree of Freedom) more degree of freedom means more accurate answer. It tells that
how much percent the independent variables predict for dependent variable if we adjust R
2

for population. Here Adjusted R2 gives negative % prediction on population if we adjust R
2
.
F-factor:
F-statistic shows combine effect of variables on dependent variables. Here F-statistic is
0.763042 shows great deal of ineffectiveness of dependent variable and its prob is
0.501441shows highly insignificance. So the Import and FX combine effect of FDI. Here we
claim that 1 = 2 = 0.
Therefore increase the data.


35
Result of equation
Date: 03/25/14 Time: 23:10
Sample: 1961 2010


C -245.4436 126.8914 -1.934281 0.0591
FX -12.72319 7.852706 -1.620230 0.1119
IMPT 0.149215 0.019396 7.693115 0.0000

Sum squared resid 16271742 Schwarz criterion 15.76552

I nterpretation:
Variable column shows all the independent variables IMPT (Imports in dollar) and FX
direct investment).
Coefficient:
1
2
Prob:
insignificant relationship with FDI. The chances of errors are minimize because prob value is
less than 0.15so we can accept the H
0
, (or H
A
rejected.)


36
T-Statistic:
R square:
R
2
Here Import and FX predict the FDI at 78% which shows strong prediction of dependent
variable.
Adjusted R
2
:
2

for population. Here Adjusted R
2
is77%.
F-factor:
85.417shows great deal of effectiveness of dependent variable and its prob is 0.00 which
shows highly significance. So the Import and FX combine effect of FDI. Here we claim that
1 = 2 0.


37
8.6.Multocolinearity (Correlation)
Result
Variance Inflation Factors
Date: 03/26/14 Time: 17:53
Sample: 1961 2010

Coefficient Uncentered Centered
Variable Variance VIF VIF

C 16101.43 2.325403 NA
FX 61.66499 9.741437 4.271703
IMPT 0.000376 7.638082 4.271703

I nterpretation:
In regression this is important that there is minimum correlation between the variables, so the
H
o
is no multi. By running Variance Inflation we find that in our data multicolinearity
problem is not exist (centered VIF value is less than 10) therefore H
o
accepted.
Decrease sample for multi
Variance Inflation Factors
Date: 04/23/14 Time: 18:32
Sample: 2005 2010

Coefficient Uncentered Centered
Variable Variance VIF VIF

C 11784613 68.42644 NA
FX 4744.246 118.8730 1.948706
IMPT 0.004978 25.17899 1.948706

I nterpretation:
VIF value is still less than 10, which means no multi.


38
8.7. Autocorrelation (Error)
LM test
Breusch-Godfrey Serial Correlation LM Test:

Obs*R-squared 23.94880 Prob. Chi-Square(1) 0.0000

Test Equation:
Dependent Variable: RESID
Date: 03/26/14 Time: 10:17
Sample: 1961 2010
Presample missing value lagged residuals set to zero.


C 6.489398 92.58834 0.070089 0.9444
FX 15.12820 6.183805 2.446423 0.0183
IMPT -0.052320 0.016279 -3.213968 0.0024
RESID(-1) 0.892201 0.137201 6.502897 0.0000

R-squared 0.478976 Mean dependent var 1.18E-13

I nterpretation:
Our claim is H
o
no auto. The Prob. F Value shows 0.00 (less than 0.1) that there is an auto
correlation in the model, also Durbin Watson stats show 1.60 (less than 2; positive auto) now
we reject the H
0
.
Therefore the need to resolve this problem through following Methods:
1) Generalized Least Square (GLS Cochrance Orcutt).
2) AR Test (Direct Test to eliminate the auto correlation.


39
1. Generalized Least Square (GLS Cochrance Orcutt)
Dependent Variable: ER
Date: 03/26/14 Time: 11:08


ER(-1) 0.653656 0.127983 5.107363 0.0000

Durbin-Watson stat 1.337226

I nterpretation:
From this table we pick the value of coefficient. The Prob. Value shows the significant result
(less than 0.1)
After generate series of transformed variable:


40
Result
Dependent Variable: TFDI
Date: 04/07/14 Time: 15:08


C -10.91832 99.79543 -0.109407 0.9134
TFX -16.18104 12.32113 -1.313276 0.1956
TIMPT 0.128234 0.027124 4.727770 0.0000


I nterpretation:
The results shows that Durbin Watson stat is decreased and R Square Value (increases) 44%.
Here F-statistic tells us that TFX and TIMPT combine give significant prediction of TFDI.
We need to check Lag for confirmation that auto correlation is removed. So we need to repeat
those steps:

41
LM test

I nterpretation:
Our claim is H
o
we reject the H
0
.
Again transforms the variables:



Test Equation:
Date: 04/07/14 Time: 15:11
Sample: 1962 2010


C -2.768123 89.03877 -0.031089 0.9753
TFX 23.64415 12.82761 1.843223 0.0719
TIMPT -0.073426 0.031735 -2.313712 0.0253
RESID(-1) 0.637863 0.178357 3.576328 0.0008

R-squared 0.221320 Mean dependent var 5.10E-14


42
Dependent Variable: ER2
Date: 04/07/14 Time: 15:17


ER2(-1) 0.368052 0.140310 2.623125 0.0117

Durbin-Watson stat 1.832558

I nterpretation:
From this table we pick the value of coefficient. The Prob. Value shows the significant result
(less than 0.1)
Result
Dependent Variable: TTFDI
Date: 04/07/14 Time: 16:07


C 32.08928 91.28820 0.351516 0.7268
TTFX -8.667252 13.94319 -0.621612 0.5373
TTIMPT 0.084595 0.028441 2.974359 0.0047


I nterpretation:
Our claim is H
o
correlation in the model, also Durbin Watson stats show 1.46 (less than 2; positive auto). We
need to check Lag for confirmation that auto correlation is removed. So we need to repeat
those steps:


43
LM test


Test Equation:
Date: 04/07/14 Time: 16:08
Sample: 1963 2010


C 5.762640 84.40440 0.068274 0.9459
TTFX 27.67443 15.95202 1.734854 0.0898
TTIMPT -0.088204 0.039859 -2.212919 0.0321
RESID(-1) 0.617348 0.209689 2.944114 0.0052

R-squared 0.164575 Mean dependent var -1.66E-14

I nterpretation:
Our claim is H
o
we reject the H
0
.


44
2. AR Test (Direct Test to eliminate the auto correlation
Date: 03/30/14 Time: 22:17
Convergence achieved after 33 iterations


C 110316.2 2628774. 0.041965 0.9667
FX -101.1167 27.65219 -3.656733 0.0007
IMPT 0.076813 0.033942 2.263056 0.0285
AR(1) 0.998625 0.033152 30.12226 0.0000


Inverted AR Roots 1.00

I nterpretation:
After running ar(1) test, we can see that the value of Durbin Watson stat is improved by
1.376 which is again not near to 2. But it changes the model significance. After running it
impt and fx are now insignificant but the Value of R Square and F-Statistic show significant
contribution in Model. It is very rare that after running AR test model will remain significant.
So the best solution for Auto Correlation is to find the missing variable and add it in to the
model.
Now we apply LM test.

45
LM test


Test Equation:
Date: 04/07/14 Time: 15:29
Sample: 1962 2010


C 1824578. 2632231. 0.693168 0.4918
FX 6.091036 28.83263 0.211255 0.8337
IMPT -0.055968 0.033730 -1.659329 0.1042
AR(1) 0.022977 0.033196 0.692151 0.4925
RESID(-1) 0.424716 0.184540 2.301482 0.0262


I nterpretation:
Our claim is H
o
we reject the H
0
.
NOTE:
Auto is not removed.

46
8.8. Heteroskedasticity
Heteroskedasticity Test: White

Scaled explained SS 161.9128 Prob. Chi-Square(1) 0.0000

Test Equation:
Dependent Variable: RESID^2
Date: 03/29/14 Time: 18:30
Sample: 1962 2010


C 9799.246 90348.52 0.108461 0.9141
ER(-1)^2 0.750294 0.113210 6.627435 0.0000


I nterpretation:
Our claim is H
o
no hetro. The Heteroskedasticity Test shows Prob. F 0.00 (less than 0.1)
which mean there is a H
0
chance of Heteroskedasticity in our Model. So we reject our claim
i.e. H
o
.


47
0
4
8
12
16
20
24
-2000 -1000 0 1000
Series: Residuals
Sample 1962 2010
Observations 49
Mean -27.52010
Median 6.335125
Maximum 1329.677
Minimum -2325.559
Std. Dev. 467.0378
Skewness -1.936200
Kurtosis 14.88229
Jarque-Bera 318.8761
Probability 0.000000
-2,000
-1,000
0
1,000
2,000
-2,000
0
2,000
4,000
6,000
65 70 75 80 85 90 95 00 05 10
Residual Actual Fitted
8.9.Graph


48
9. Dummy variable
1 =democracy and 0 =dictatorship
Date: 04/30/14 Time: 16:37
Sample: 1961 2010


C -236.9946 145.1643 -1.632596 0.1094
FX -12.62666 7.974235 -1.583432 0.1202
IMPT 0.149577 0.019818 7.547395 0.0000
DUM -23.61242 190.0964 -0.124213 0.9017


I nterpretation:
By introducing dummy variable of democracy it is found that democracy has the negative
impact on FDI and its prob shows insignificant result.


49
10. Pooled data

I nterpretation:
Variable column shows all the independent variables IMPT (Imports in dollar) and FX
direct investment).
Coefficient:
1
Method: Panel EGLS (Two-way random effects)
Date: 04/25/14 Time: 22:41
Sample: 1982 2012
Periods included: 31
Cross-sections included: 4
Total panel (balanced) observations: 124
Swamy and Arora estimator of component variances


C 1.83E+09 4.15E+09 0.440221 0.6606
FX -98263858 48708565 -2.017384 0.0459
IMPT 0.132540 0.002711 48.89252 0.0000

Effects Specification
S.D. Rho

Cross-section random 7.52E+09 0.4140
Period random 0.000000 0.0000
Idiosyncratic random 8.95E+09 0.5860

Weighted Statistics

Adjusted R-squared 0.951129 S.D. dependent var 4.04E+10
S.E. of regression 8.93E+09 Sum squared resid 9.66E+21

Unweighted Statistics

Sum squared resid 1.20E+22 Durbin-Watson stat 0.740972


50
2
Prob:
insignificant relationship with FDI. The chances of errors are minimize because prob value is
less than 0.15 so we can accept the H
0
, (or H
A
rejected.)
T-Statistic:
R square:
R
2
Here Import and FX predict the FDI at 95% which shows strong prediction of dependent
variable.
Adjusted R
2
:
2

for population. Here Adjusted R
2
is 95%.
F-factor:
1197.9 shows great deal of effectiveness of dependent variable and its prob is 0.00 which
shows highly significance. So the Import and FX combine effect of FDI. Here we claim that
1 = 2 = 3 0.


51
11. Hausman Test
Correlated Random Effects - Hausman Test
Equation: Untitled
Test cross-section and period random effects

Test Summary
Chi-Sq.
Statistic Chi-Sq. d.f. Prob.

Cross-section random 0.151986 2 0.9268
Period random 10.735036 2 0.0047
Cross-section and period random 9.333851 2 0.0094

** WARNING: estimated period random effects variance is zero.

Cross-section random effects test comparisons:

Variable Fixed Random Var(Diff.) Prob.

FX
-
94261609.25
4209
-
98263858.137
070
12333558863
5382.50 0.7186
IMPT 0.132371 0.132540 0.000000 0.6981

Cross-section random effects test equation:
Method: Panel EGLS (Period random effects)
Date: 04/25/14 Time: 22:45
Sample: 1982 2012


C 1.72E+09 1.79E+09 0.960628 0.3387
FX -94261609 49958582 -1.886795 0.0616
IMPT 0.132371 0.002746 48.21344 0.0000

S.D. Rho

Cross-section fixed (dummy variables)
Period random 0.000000 0.0000

Weighted Statistics




52

Period random effects test comparisons:


FX
204899505.9
79444
-
98263858.137
070
20947549279
648265 0.0362
IMPT 0.146359 0.132540 0.000029 0.0102

Period random effects test equation:
Method: Panel EGLS (Cross-section random effects)
Date: 04/25/14 Time: 22:45
Sample: 1982 2012


C -9.95E+09 5.71E+09 -1.743604 0.0846
FX 2.05E+08 1.53E+08 1.341763 0.1830
IMPT 0.146359 0.006025 24.29142 0.0000

S.D. Rho

Cross-section random 7.52E+09 0.4140
Period fixed (dummy variables)

Weighted Statistics




Cross-section and period random effects test comparisons:


FX
277690543.6
91855
-
98263858.137
070
25695103598
748958 0.0190
IMPT 0.148011 0.132540 0.000032 0.0059


53
Cross-section and period random effects test equation:
Method: Panel Least Squares
Date: 04/25/14 Time: 22:45
Sample: 1982 2012


C -1.25E+10 6.21E+09 -2.017572 0.0467
FX 2.78E+08 1.68E+08 1.657518 0.1010
IMPT 0.148011 0.006239 23.72396 0.0000


Cross-section fixed (dummy variables)
Period fixed (dummy variables)

S.E. of regression 8.95E+09 Akaike info criterion 48.90617

I nterpretation:
Our claim is Ho random effect is appropriate if prob is greater than 0.1, therefore in our
analysis test result shows that H
o
is accepted and our model is random effect model.


54
12. t-test
12.1. One mean comparison
One-Sample Statistics

N Mean Std. Deviation Std. Error Mean
Foreign direct investment 30 7.8420E8 1.02626E9 1.87368E8

One-Sample Test

Test Value = 863358228.9
t df Sig. (2-tailed) Mean Difference
95% Confidence Interval of the
Difference
Lower Upper
Foreign direct investment -.422 29 .676 -79161000.04223 -4.6237E8 3.0405E8

I nterpretation:
After applying one sample t-test it is identified that the average mean of FDI lies between
7.8420E
8.
Claim accepted.


55
12.2. I ndependent sample
FDI (1961 - 2010) with democracy and dictatorship

Group Statistics

Regime N Mean Std. Deviation Std. Error Mean
FDI Dictatorship 21 87.5000 146.60830 31.99255
Democracy 29 994.8793 1523.12871 282.83790

Independent Samples Test

Levene's Test for
Equality of
Variances t-test for Equality of Means
F Sig. t df
Sig. (2-
tailed)
Mean
Difference
Std. Error
Difference
95% Confidence
Interval of the
Difference
Lower Upper
FDI Equal variances
assumed
17.980 .000 -
2.713
48 .009 -
907.37931
334.42880 -
1579.79347
-
234.96515
Equal variances
not assumed

-
3.188
28.714 .003 -
907.37931
284.64153 -
1489.78814
-
324.97048

I nterpretation:
After applying independent sample t-test it is identified that the mean of FDI is not same
democratic and dictatorship era.


56
12.3. Paired sample
Import in Pakistan before (1999 - 2004) and after (2005 - 2010) earth quake.
Paired Samples Statistics

Mean N Std. Deviation Std. Error Mean
Pair 1 Import before earthquake 1.1951E10 8 1.40958E9 4.98362E8
Import after earth quake 3.4276E10 8 7.56845E9 2.67585E9

Paired Samples Correlations

N Correlation Sig.
Pair 1 Import before earthquake &
Import after earth quake
8 .380 .352

Paired Samples Test

Paired Differences
t df
Sig. (2-
tailed) Mean
Std.
Deviation
Std. Error
Mean
95% Confidence Interval
of the Difference
Lower Upper
Pair
1
Import before
earthquake -
Import after earth
quake
-
2.23245E10
7.15192E9 2.52859E9 -
2.83037E10
-
1.63453E10
-
8.829
7 .000

I nterpretation:
After applying paired sample t-test it is identified that the mean of Import is grater after
earthquake incident of 2005.


57
13. ANNOVA
a. Dependent FDI and Factor - Countries
ANOVA
Foreign direct investment
Sum of Squares df Mean Square F Sig.
Between Groups 1.272E21 2 6.360E20 11.641 .000
Within Groups 4.917E21 90 5.463E19
Total 6.189E21 92

Multiple Comparisons
Tukey HSD
(I) Countries (J) Countries
Mean
Difference (I-J) Std. Error Sig.
Lower Bound Upper Bound
Pakistan India -7.55541E9 1.87742E9 .000 -1.2029E10 -3.0813E9
Bangladesh 5.50518E8 1.87742E9 .954 -3.9236E9 5.0246E9
India Pakistan 7.55541E9 1.87742E9 .000 3.0813E9 1.2029E10
Bangladesh 8.10593E9 1.87742E9 .000 3.6318E9 1.2580E10
Bangladesh Pakistan -5.50518E8 1.87742E9 .954 -5.0246E9 3.9236E9
India -8.10593E9 1.87742E9 .000 -1.2580E10 -3.6318E9
*. The mean difference is significant at the 0.05 level.

Tukey HSD
a

Countries N
Subset for alpha = 0.05
1 2
Bangladesh 31 2.8499E8
Pakistan 31 8.3551E8
India 31 8.3909E9
Sig. .954 1.000
Means for groups in homogeneous subsets are displayed.
a. Uses Harmonic Mean Sample Size = 31.000.

I nterpretation:
After applying ANNOVA it is identified that the mean of mean FDI of Bangladesh =
Pakistan India.

58

b. Dependent FX and Factor Countries
ANOVA
Exchange rate
Between Groups 3567.137 2 1783.568 4.953 .009
Within Groups 32406.545 90 360.073
Total 35973.682 92

Exchange rate
Tukey HSD
Mean
Pakistan India 8.29428 4.81980 .203 -3.1918 19.7804
Bangladesh -6.85318 4.81980 .334 -18.3393 4.6329
India Pakistan -8.29428 4.81980 .203 -19.7804 3.1918
Bangladesh -15.14746
*
4.81980 .006 -26.6335 -3.6614
Bangladesh Pakistan 6.85318 4.81980 .334 -4.6329 18.3393
India 15.14746
*
4.81980 .006 3.6614 26.6335

Exchange rate
Tukey HSD
a

Countries N
1 2
India 31 32.7954
Pakistan 31 41.0897 41.0897
Bangladesh 31 47.9429
Sig. .203 .334
Means for groups in homogeneous subsets are
displayed.

I nterpretation:
After applying ANNOVA it is identified that the mean of mean FX of Bangladesh = Pakistan
India.


59
c. Dependent IMPT and Factor - Countries
ANOVA
Import
Between Groups 2.754E23 2 1.377E23 14.937 .000
Within Groups 8.297E23 90 9.219E21
Total 1.105E24 92

Import
Tukey HSD
Mean
Pakistan India -1.12463E11 2.43881E1
0
.000 -1.7058E11 -5.4344E10
Bangladesh 5.73783E9 2.43881E1
0
.970 -5.2381E10 6.3857E10
India Pakistan 1.12463E11 2.43881E1
0
.000 5.4344E10 1.7058E11
Bangladesh 1.18201E11 2.43881E1
0
.000 6.0082E10 1.7632E11
Bangladesh Pakistan -5.73783E9 2.43881E1
0
.970 -6.3857E10 5.2381E10
India -1.18201E11 2.43881E1
0
.000 -1.7632E11 -6.0082E10

Import
Tukey HSD
a

Countries N
1 2
Bangladesh 31 1.0491E10
Pakistan 31 1.6229E10
India 31 1.2869E11
Sig. .970 1.000
Means for groups in homogeneous subsets are
displayed.

I nterpretation:
After applying ANNOVA it is identified that the mean of mean Impt of Bangladesh =
Pakistan India.

Effect of Import and Exchange Rate On FDI: Evidence of Asian Countries

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Effect of Import and Exchange Rate On FDI: Evidence of Asian Countries

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Effect of Import and Exchange rate on FDI: Evidence of Asian Countries

Mehwish Aqeel 8403

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