To solve this problem, Engle and Granger (1987), Stock and Watson (1988), Johansen cointegration technique (1988) and Autoregressive Distributed Lags (
ARDL) can be used.
With a time span covering 16 years, an autoregressive distributed lag (
ARDL) model is mostly suitable, as it reduces the bias in the long-run parameter estimates in finite samples.
Auto-Regressive Distributed Lag (
ARDL) bounds test method is being utilized to address the main objective issue.
The outcomes of the
ARDL Cointegration Analysis specify that the calculated F-statistic which is 4.459528 is greater than upper critical bounds at the 1% significance level once we used X1, X2, X3, X4, X5, and X6 are employed as explanatory variables.
The task will be completed using nonlinear
ARDL suggested by Shin et al.
Study used Auto-regressive Distributive Lag (
ARDL) technique to estimate the equation (2).
An
ARDL approach was adopted for the study, which discovered that remittances have a positive and significant impact on economic growth on one hand and that remittances were accountable for cutbacks in poverty on the other hand.
Rahman (2007) examined the impacts of FDI and exports on the real GDP of some Asian nations such as (India, Bangladesh, Pakistan, and Sri Lanka) by applying the
ARDL approach.
But this study uses Pesaran et al., (2001) most advanced Autoregressive Distributed Lag (
ARDL) of co-integration.
He employed the Bounds test of the autoregressive distributed lag (
ARDL) model to establish evidence of co-integration between the two variables, and provided evidence that RMB devaluation improved the trade balance.