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

Significance of wastage in supply and demand calculus, Normal 0 ...

Normal 0 false false false EN-IN X-NONE X-NONE MicrosoftInternetExplorer4

Supply of basic industrial inputs, Supply of Basic Industrial Inputs: ...

Supply of Basic Industrial Inputs: Allowing their duty-free imports by exporters would require an elaborate machinery of customs and import licensing to ensure that the impor

Recent development in demand analysis, RECENT DEVELOPMENT IN DEMAND ANALYSI...

RECENT DEVELOPMENT IN DEMAND ANALYSIS: For many years economic theorists analysed the optimal behaviour of consumers while econometricians estimated consumer demand and expend

Advantages and disadvantages of a monopoly market, Problem 1: i) ‘There...

Problem 1: i) ‘There is a trade-off between inflation and unemployment.' Do you agree with this statement? Justify your example using appropriate diagrams. ii) Mauritius is

Long run eq, The raspberry growing industry is a perfectly competitive indu...

The raspberry growing industry is a perfectly competitive industry. The firms in the industry have a U-shaped LAC, minimum average cost is $8 and the minimum efficient scale is 4 u

General equilibirium, What is the theory of second best? Prove the theorem ...

What is the theory of second best? Prove the theorem with the help of a diagram

Economics of scale, give a detailed discussion on the term economics of sca...

give a detailed discussion on the term economics of scale as applied to economics, highting examples,limitation,and original of economics of scale.

Educational financing, Normal 0 false false false EN-IN...

Normal 0 false false false EN-IN X-NONE X-NONE MicrosoftInternetExplorer4

Calculate the required reserve ratio, 1. Calculate the required reserve rat...

1. Calculate the required reserve ratio. 2. Assume that Pam wants to borrow money to pay for a new car from Sharpeland Bank. a. What is the maximum amount that Sharpeland Ban

Marketing economies, Marketing Economies: These are derived from the ...

Marketing Economies: These are derived from the bulk purchasing of inputs and bulk distribution of outputs. A large firm is able to buy its raw materials in larger quantities

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