Savings, investment, and growth in Nepal: an empirical analysis

Financial Innovation

Table 5 Bound testing for existence of a level relationship

Equation	F-value	Break Year	Lag order	Critical Value-Upper bound (1%)
Equation	F-value	Break Year	Lag order	Pesaran et al. (2001)	Narayan (2005)
F (ln GPC/ln GDS, ln INV)	8.541^a	2001	(3, 3, 3)	6.36	7.337
F (ln GDS/ln GPC, ln INV)	2.64	1997	(1, 2, 1)	6.36	7.337
F (ln INV/ln GDS, ln GPC)	1.26	2007	(2, 1, 0)	6.36	7.337

Note: The values between parentheses are the selected number of lags based on the Schwarz information criterion (SIC). GPC, GDS, and INV stand for the real GDP per capita, gross domestic savings, and investment, respectively. The critical value from Narayan (2005) is obtained for an unrestricted intercept and no trend (n = 40 and K = 2).
^asignificant at the 1% level