Cross Sectional Dependence and Cointegration Analysis among the GDP-Foreign Direct Investment and Aggregate Credits: Evidence from Selected Developing Countries
Vol. 4 No. 11 (2014), Articles
Vol. 4 No. 11 (2014)

Cross Sectional Dependence and Cointegration Analysis among the GDP-Foreign Direct Investment and Aggregate Credits: Evidence from Selected Developing Countries

Senturk Mehmet
Kilis 7 Aralık University, Faculty of Economics and Administrative Sciences, Department of International Trade and Logistics, Turkey
Akbas Yusuf Ekrem
Adiyaman University, Faculty of Economics and Administrative Sciences, Department of Economics, Turkey
Ozkan Gokcen
Gaziantep University, Vocational High School, Department of Foreign Trade, Turkey
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Keywords

GDP, FDI, Aggregate credits, Cross-sectional dependency, Panel cointegration analysis, Non-stationary panels.

How to Cite

Mehmet, S. ., Ekrem, A. Y. ., & Gokcen, O. . (2014). Cross Sectional Dependence and Cointegration Analysis among the GDP-Foreign Direct Investment and Aggregate Credits: Evidence from Selected Developing Countries. Asian Economic and Financial Review, 4(11), 1485–1501. Retrieved from https://archive.aessweb.com/index.php/5002/article/view/1285
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Abstract

In this study; it is investigated that gross domestic product (GDP), foreign direct investment (FDI) and aggregate credits (CR) relationship of seven developing countries over the period of 1982-2010. Firstly, CDLM tests were applied to detect the cross-sectional dependency. Then, SURADF and CADF tests were applied. According to cross-sectional augmented panel unit root test (CIPS) result that detect if the entire panel carries a unit root, is consistent with SURADF and CADF test results. Finally, cointegration is determined among GDP, FDI and CR in all cases via Westerlund (2007)) Error Correction and Westerlund and Edgerton (2007) Lagrange Multiplier (LM) Bootstrap panel cointegration tests.

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