stulated by Feder (1982), who mentioned that exports contribute to economic growth in a variety of ways: economies of scale and incentives for technological improvement. Thus, marginal factor productivities are expected to be higher in export industries than in non-export industries.
4.5 Data Sources
For the purpose of this study, time series data has been used. A time series is an ordered chain of values of a variable at equally spaced time intervals. Time series analysis is used for economic and sales forecasting, budgetary analysis, inventory studies or stock market analysis. It encompasses techniques to investigate data in order to extract meaningful statistics and other characteristics of the data.
A time series model indicates that observations close together in time will be more closely correlated than observations further apart. As such, time series models use the natural one-way ordering of time so that values for a given period can be expressed as deriving in some way from past values.
Data has been collected for the period 1976 to 2009. Figures for the explanatory variables namely investment and exports and that for the dependent variable real gross domestic product were obtained from the Central Statistical Office. Data for inflation and tourism receipts was obtained from annual reports of the Bank of Mauritius.
The analysis of data will be done using the Microfit 4.0 software. Before carrying out the regression, the stationarity of the variable should be tested in order to avoid spurious results and invalidity of the model. The ARDL model will be evaluated. Furthermore, a co-integration test shall be performed to determine if an Error Correction Model (ECM) must be used.