The direction of the Granger non-causality between 'InOFDI and 'InGDP can be
determined by using a Wald test, which follows the chi-square distribution, to examine
the joint significance of the right-hand-side variables in equations (1) and (2). If, for
instance, the null hypothesis of non-causality from 'InGDP to 'InOFDI in equation (1)
(i.e. Ho: a21 = a22 = ... = a2p = 0) is rejected, the test suggests that the direction of causality
is running from 'InGDP to 'InOFDI supporting the investment development path
theory. Similarly, if the null hypothesis of non-causality from 'InOFDI to 'InGDP in
equation (2) (i.e. Ho: b11 = b12 = ... = b1p = 0) is rejected, the test implies that there is also a
reverse causality running from 'InGDP to 'InOFDI advocating the OFDI-led growth
hypothesis.