6. Estimation and Results
Before applying the ARDL test and the T-Y no-causality test in the augmented VAR
(k+dmax), we first establish the maximal integration order (dmax) of the variables by
carrying out an Augmented Dickey- Fuller (ADF) unit root tests on the GDP growth and
FDI series in their log-levels and log differenced forms. The results, reported in Table 2
indicate that real GDP growth and FDI ratio are non-stationary in their respective levels.
Then again, after first differencing the variables, the null hypothesis of a unit root in the
ADF tests were rejected at the 1% significance level for both series. Thus the two
variables are integrated of order one,