Table 1 Summary of macrocosmic variables
Abbreviation
|
|
Definition
|
|
Source
|
Dependent Variables
|
|
|
|
|
GDS
|
|
The ratio of Gross Domestic Savings to GDP
|
WDI
|
GFCF
|
|
The ratio of Gross Fixed Capital Formation to GDP
|
WDI
|
GDPPC
|
|
The natural log of real Gross Domestic Product per Capita
|
WDI
|
Variable of Interest
|
|
|
|
|
|
DEPR
|
Deposit interest rate
|
|
WDI
|
Control Variables
|
|
|
|
|
|
LGFCF
|
|
The natural log of Gross Fixed Capital Formation
|
WDI
|
PDC
|
The ratio of Private Domestic Credit to GDP
|
WDI
|
LTRA
|
The natural log ratio of trade to GDP
|
|
WDI
|
LIQ
|
|
The ratio of liquid liabilities to GDP
|
WDI
|
LDNI
|
|
The natural log ratio of Gross National Income per Capita
|
WDI
|
LRGDP
|
The natural log ratio of real Gross Domestic Product
|
WDI
|
CPI
|
|
Consumer Price Index
|
|
WDI
|
|
|
|
|
|
|
|
|
|
Source: Author’s computation
Table 2 summary of the descriptive statistics
Period
|
1980 - 2016
|
Source
|
World Bank - World Development Index (WDI)
|
Code
|
GDPPC
|
LRGDP
|
LGNI
|
GDP
|
LGFCF
|
GFCF
|
DEPR
|
CPI
|
LIQ
|
PDC
|
LTRA
|
Mean
|
2.29
|
8.531
|
2.359
|
17.376
|
7.816
|
0.187
|
5.995
|
7.66
|
16.731
|
6.12
|
2.252
|
Median
|
2.22
|
8.736
|
2.314
|
-5.007
|
8.003
|
0.143
|
6.181
|
6.823
|
11.639
|
3.53
|
2.01
|
Std. Dev.
|
0.31
|
1.209
|
0.383
|
30.07
|
1.052
|
0.135
|
2.281
|
4.603
|
19.684
|
6.47
|
1.236
|
Skewness
|
0.31
|
-5.287
|
2.369
|
-0.408
|
-4.478
|
1.627
|
0.784
|
1.33
|
2.33
|
0.85
|
5.543
|
Kurtosis
|
2.23
|
30.881
|
12.309
|
3.142
|
24.927
|
4.706
|
2.78
|
6.03
|
10.684
|
2.41
|
32.823
|
Jarque-Bera
|
1.45
|
1,370.77
|
168.195
|
1.057
|
864.849
|
20.804
|
3.867
|
25.053
|
124.49
|
4.99
|
1,560.60
|
Observations
|
37
|
37
|
37
|
37
|
37
|
37
|
37
|
37
|
37
|
37
|
37
|
Source: Author’s computation
Table 3: Breakpoint Unit Root Test
|
|
t-statistics
|
|
|
Variables
|
|
Level
|
First Difference with Intercept
|
Order of Integration
|
GDPPC
|
-2.826
|
-6.971**
|
I(1)
|
LRGDP
|
-2.480
|
-12.054**
|
I(1)
|
LGNI
|
-1.872
|
-4.478**
|
I(1)
|
GDS
|
-2.684
|
-7.930**
|
I(1)
|
LGFCF
|
-1.755
|
-5.012**
|
I(1)
|
GFCF
|
-3.142
|
-7.692**
|
I(1)
|
DEPR
|
-2.953
|
-7.813**
|
I(1)
|
CPI
|
-3.402
|
-8.570**
|
I(1)
|
LIQ
|
-2.483
|
-11.226**
|
I(1)
|
PDC
|
-3.642
|
-12.940**
|
I(1)
|
LTRA
|
-2.213
|
-5.843**
|
I(1)
|
Note: ***, **, and * denote the significance levels of 1%, 5%, and 10% respectively. The null hypothesis for unit root
|
Source: Author’s computation
Table 4: Bayer-Hanch cointegration test results.
|
Model Specifications
|
Fisher Statistics
|
Fisher Statistics
|
Cointegration Decision
|
EG-JOH
|
EG-JOH-BAN-BOS
|
|
= ƒ( DEPR,PDC,LTRA,LIQ,LGNI,LRGDP, CPI )
|
58.9048
|
114.1669
|
Yes
|
= ƒ (DEPR,PDC,LTRA,LIQ,LGNI,LRGDP, CPI )
|
55.6383
|
110.9004
|
Yes
|
= ƒ(DEPR,PDC,LTRA,LIQ,LGNI,LRGDP CPI )
|
57.3170
|
167.8411
|
Yes
|
Significance level
|
Critical value
|
Critical value
|
|
Significance level at 5%
|
10.295
|
19.688
|
|
Source: Author’s computation
Table 5: Effect of Deposit Interest Rate on Gross Domestic Savings
Regressor
|
|
DOLS
|
FMOLS
|
CCR
|
DEPR
|
|
4.24E-13**
(0.034)
|
4.412***
(0.002)
|
8.230***
(0.000)
|
LIQ
|
|
8.71E-14***
(0.005)
|
0.020
(0.870)
|
0.034
(0.821)
|
GDP
|
|
1.000***
(0.000)
|
0.185**
(0.021)
|
0.148**
(0.317)
|
CPI
|
|
-1.32E-13
(0.148)
|
-0.308
(0.521)
|
-1.011**
(0.043)
|
LGNI
|
|
1.76E-11***
(0.000)
|
0.889
(0.933)
|
-5.340
(0.708)
|
Adj. R-squared
|
|
1.000
|
0.396
|
0.391
|
Durbin-Watson
|
|
2.021
|
|
|
Lead
|
|
1
|
|
|
Lag
|
|
1
|
|
|
Note: ***, **, and * denote the significance level of 1%, 5%, and 10% respectively. The null hypothesis for robustness checks
Source: Author’s computation
Table 6: Effect of Deposit Interest Rate on Investment Proxy by Gross Fixed Capital Formation
Regressor
|
DOLS
|
FMOLS
|
CCR
|
DEPR
|
0.017**
(0.021)
|
0.055***
(0.000)
|
0.054***
(0.000)
|
LGDP
|
-0.258***
(0.000)
|
-0.011***
(0.000)
|
-0.022***
(0.000)
|
CPI
|
0.005
(0.170)
|
-0.004***
(0.000)
|
-0.004***
(0.000)
|
LGFCF
|
0.323***
(0.000)
|
0.290***
(0.000)
|
0.294***
(0.000)
|
Adj. R-squared
|
0.984
|
0.447
|
0.446
|
Durbin-Watson Stat
|
2.051
|
Lead
|
1
|
Lag
|
1
|
Note: ***, **, and * denote the significance of level 1%, 5%, and 10% respectively. The null hypothesis for robustness checks
Source: Author’s computation
Table 7: Effect of Deposit Interest Rate on Economic Growth
Regressor
|
DOLS
|
FMOLS
|
CCR
|
DRPR
|
0.255***
(0.000)
|
0.034***
(0.000)
|
0.046***
(0.000)
|
LGFCF
|
0.671***
(0.000)
|
0.332***
(0.000)
|
0.273***
(0.000)
|
CPI
|
-0.037***
(0.000)
|
-0.015***
(0.000)
|
-0.015
(0.000)
|
PDC
|
-0.003
(0.424)
|
-0.062***
(0.000)
|
-0.047
(0.000)
|
LTRA
|
1.862***
(0.000)
|
0.450***
(0.000)
|
0.574
(0.000)
|
Adj. R-squared
|
0.998
|
0.869
|
0.848
|
Durbin-Watson Stat
|
1.90
|
|
|
Lead
|
0
|
|
|
Lag
|
2
|
|
|
Note: ***, **, and * denote the significance level of 1%, 5%, and 10% respectively. The null hypothesis for robustness checks
|
Source: Author’s computation