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The Official Journal of the Pan-Pacific Association of Input-Output Studies (PAPAIOS)

Table 9 Real exchange volatility and the services sector performance.

From: Real exchange rate undervaluation, regional integration and services sector performance: evidence from the East African Community

 

(1)

PMG-ARDL

(2)

CS-ARDL

Speed of adjustment

 ECT

− 0.297**

(0.148)

− 0.375***

(0.138)

Longrun

 ln Capital

0.366***

(0.113)

0.301**

(0.287)

 ln Labor

− 0.187**

(0.082)

− 0.102**

(0.533)

 Growth

0.003

(0.003)

0.030

(0.004)

 Inflation

− 0.007***

(0.002)

− 0.002*

(0.003)

 ln RER_VOL

− 0.492**

(0.215)

− 0.201*

(0.161)

Shortrun

 ln Capital

− 0.008

(0.050)

− 0.003*

(0.034)

 ln Labor

0.055

(0.173)

0.012

(0.122)

 Growth

− 0.002

(0.002)

− 0.001

(0.003)

 Inflation

0.001**

(0.001)

0.002*

(0.001)

 ln RER_VOL

0.215

(0.187)

0.171

(0.120)

Constant

0.980**

(0.497)

0.863***

(0.756)

Observations

104

104

Diagnostic tests

 Hausman test (χ2, p-value)

6.02

[0.3046]

− 

 Auto-correlation test

21.496 [0.1891]

  

 Normality test

2.79 [0.2474]

  

 Heteroscedasticity test

40.17 [0.1211]

  
  1. The Hausman test was carried out to choose between Mean Group ARDL and PMG-ARDL, and the latter was preferred. REL_VOL denotes real exchange rate volatility, calculated as ratio of the standard deviation to the mean; Standard errors in parentheses
  2. ***p < 0.01
  3. **p < 0.05
  4. *p < 0.1; ARDL (1 0 0 0 0)