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

Marginal revenue productivity theory, Question 1: i) Derive and explain...

Question 1: i) Derive and explain Harberger's (1954) welfare loss estimates of monopolizing a perfectly competitive firm. ii) What are the roles of advertising? Can it lead

Describe primary interests and theory of supply and demand, Part 1 - Sele...

Part 1 - Select a construction-based business of your choice and explain stakeholder theory to illustrate the primary interests of the stakeholder groups and identify any areas o

Principles of microeconomics, can you help me figure out how to create a gr...

can you help me figure out how to create a graph with little or no information

Return on machine, a machine cost 18871.00 today. at the end of each year I...

a machine cost 18871.00 today. at the end of each year I own the machine & it gives me returns of 4,948.00 after paying repairs and maintenance. After 6 years, I expect to sell it

Economic efficiency, Economic Ef ficiency The effort to ma...

Economic Ef ficiency The effort to making products and services in the least costly way without sacrificing excellence.

Austrian economics, Austrian economics is a brand of neo-classical economic...

Austrian economics is a brand of neo-classical economics that was established in Vienna during the late 19th century & first half of the 20th century. Austrian economics was strong

Explain about social-democracy, Q. Explain about Social-Democracy? Soci...

Q. Explain about Social-Democracy? Social-Democracy:It's a reformist political strategy that aims to win certain improvements in social and economic conditions under capitalism

PPC schedule, 1)The productive capability of an economy is such that to pro...

1)The productive capability of an economy is such that to produce 5 units of military good it takes 2 workers to be employed while 10 units of consumer goods require 3 workers. Res

Introduction, How to start Economics Introduction assignment?

How to start Economics Introduction assignment?

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