Econometric equation, Microeconomics

Assignment Help:

This research will follow the methodology of econometrics; Chao, 2005; Castle & Shephard, 2009):

1. Specification of the model using a specific stochastic equation, together with a priori theoretical expectations about the sign and size of the parameters of the function.

2. Data collection on the variables of the model and estimation of the coefficients of the function using appropriate econometric techniques.

3. Evaluation of the estimated coefficients of the function based on economic statistical and econometric criteria.

 The study will follow the econometric procedure to analyze the relationship between FDI, imports and exports, and respective equations.  For bivariate models related to FDI and imports and FDI and exports, the model will investigate relationships following the equations:

 ( 19) (20) (21)  EXP = βn + βn+1 INV + u,

            where EXP is exports from the technology sector, INV is Foreign Direct Investment or Domestic Investment to the technology sector, βn the unknown constant parameter, parameter βn+1 is the slope coefficient, and u is the random disturbance, error, or stochastic term.

(22) (23) (24)  IMP = βn - βn+1 INV + u,

            where IMP is imports from the technology sector, INV is Foreign Direct Investment or Domestic Investment to the technology sector, βn the unknown constant parameter, parameter βn+1 is the slope coefficient, and u is the random disturbance, error, or stochastic term.

For multivariate models related to FDI and imports and FDI and exports, the model will investigate relationships following the equations:

(25)  EXP = βn + βn+1 INV. + βn+2INVN-U.S. + βn+3 INV   + u,

            where EXP is exports from the technology sector, INV is investment to the technology sector and βn, βn+1, βn+2, and βn+3 are the unknown constant parameters. The parameters βn+1, βn+2, and βn+3 are the slope coefficients, and u is the random disturbance, error, or stochastic term.

 (26)  IMP= βn + βn+1 INV - βn+2INV - βn+3 INV   + u,

            where IMP is imports from the technology sector, INV is investment to the technology sector, and βn, βn+1, βn+2, and βn+3 β1, β2, β3 and β4 are the unknown constant parameters. The parameters βn+1, βn+2, and βn+3 are the slope coefficients, and u is the random disturbance, error, or stochastic term.


Related Discussions:- Econometric equation

Causes of inflation, Causes of inflation: Excessive growth in wages ...

Causes of inflation: Excessive growth in wages relative to productivity can cause inflationary pressures. This causes aggregate demand to increase relative to aggregate supp

Physical capital, Physical Capital: A tangible tool, machine, building or o...

Physical Capital: A tangible tool, machine, building or other productive asset that is used to produce other goods or services. Pollution: Many economic activities involve disch

Differentiate between economic development and growth, Problem: i) Diff...

Problem: i) Differentiate between economic development and economic growth. ii) Describe carefully how, using the expenditure approach, national income is calculated. ii

Bandwagon effect, In the diagrams related to bandwagon effect, why do we sa...

In the diagrams related to bandwagon effect, why do we say when the price is 30$ the demand is 40?

Application on infifference curve , i want an application on indifference c...

i want an application on indifference curve of a specific firm? can i get it easily?

Market Analysis, Is coca-cola an oligopoly or monopolistic competition

Is coca-cola an oligopoly or monopolistic competition

Advantage in producing a particular good , 1.      How can a nation and its...

1.      How can a nation and its producers determine whether or not it has a comparative advantage in producing a particular good or service? a 2.  The above figure show

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd