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

Curvature of the iso-quant, Curvature of the Iso-quant: An iso-qunat i...

Curvature of the Iso-quant: An iso-qunat is convex to the origin. This is so because as more and more units labour are employed, the producer would prefer to give up less and

Keynesian cross model , For the following assume that b=.95 1, If the eco...

For the following assume that b=.95 1, If the economy is short of the full employment level by 1.5 trillion, what could be done in the simple Keynesian cross model to fill the ga

S block elements, which is more dense-Rubidium or Rubidium Hydride?

which is more dense-Rubidium or Rubidium Hydride?

Utility-expenditure duality, Utility-Expenditure Duality: Consider the...

Utility-Expenditure Duality: Consider the minimisation of the  expenditures necessary to achieve a specified utility level. The solution for qi yields the compensated demand f

Law of demand, The price of petrol fell during the past year. a. Explain...

The price of petrol fell during the past year. a. Explain why the law of demand applies to petrol just as it does to all other goods and services. b. Explain how the substitu

Distinguish between fiscal and monetary policy, Problem: (a) Distingui...

Problem: (a) Distinguish between fiscal and monetary policy, giving examples where appropriate. (b) Explain how fiscal and monetary policies might be used by a government

Substitute product, If we have two products, A and B, which are substitutes...

If we have two products, A and B, which are substitutes, we can expect that a rise in the price of A (or B) will cause the demand for B (or A) to go up.” Examine this statement wit

What is corporation, Q. What is Corporation? A corporation is a form of...

Q. What is Corporation? A corporation is a form of business established as an independent legal entity, separate from individuals who own it. A main benefit, for owners, of thi

Derive a demand function, Zac consumes only pizza and chianti. He consumes ...

Zac consumes only pizza and chianti. He consumes these goods in fixed proportions: 2 slices of pizza for one glass of chianti. His income is $100 per week. a. Derive demand func

Economics, Calculate point elasticity of demand for demand function Q=10-2p...

Calculate point elasticity of demand for demand function Q=10-2p for decrease in price from Rs 3 to Rs 2

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