... as Yt = ( -1 )Yt-1 + ut = Yt-1 + ut (3) Where = -1 and is the first-difference, Yt = Yt - Yt-1. If is in fact 0, we can write (3) as Yt = Yt - Yt-1= ut (4) ... 2, and is non-autocorrelated. Equation (1) is a first-order, or AR(1), regression in that we regress the value of Y at time t on its value at time (t-1). If the coefficient of Yt-1 is in fact ... perspective of the host country, FDI includes three types: Import- substituting FDI, Export-increasing FDI, and Government-initiated FDI. + Import-substituting FDI involves the production of goods previously...