ASSIGNMENT ON ECONOMETRICS TOPIC DETERMINANTS OF VIETNAMS ECONOMIC GROWTH

Bui Duong Hai Class: Financial Economics 62 Group: FE_62A_03 TIEU LUAN MOI download : skknchat@gmail.com... TIEU LUAN MOI download : skknchat@gmail.com... Within the scope of this study,

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NATIONAL ECONOMICS UNIVERSITY

FACULTY OF ECONOMIC

-*** -ASSIGNMENT ON ECONOMETRICS

TOPIC: DETERMINANTS OF VIETNAM'S

ECONOMIC GROWTH

Instructor: MSc Bui Duong Hai

Class: Financial Economics 62

Group: FE_62A_03

TIEU LUAN MOI download : skknchat@gmail.com

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Hanoi, 2021

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No Full name - ID Contribution %

1 Nguyễn Hà Anh

-25 11200205

2 Nguyễn Thanh

25 Thảo - 11203678

3 Phạm Minh Thăng

-25 11203526

4 Thái Việt Trung

-25 11208242

%

INDEX

1 INTRODUCTION 3

1.1 Problem 3

1.2 Research questions 3

2.2 Basic concepts 3 2.3 Related researches 4

3.1 Model and data 6

a Describe the variables 6 b

Describe the data 7

3.3 Test and inference 9

f Heteroscedasticity 13

3.4 Verification of hypothesis 13

b Are regression coefficients statistically significant? 13

c Statistic for overall significant 15

5.1 Summary our work 16

5.2 Summary of answering the question 17

5.4 Limitation 18

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7 APPENDIX 19

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I INTRODUCTION

1 Problem

Since the renovation in 1986, Vietnam has achieved certain achievements

on the road to building a rich and strong country Uniting 80 million people and interacting with the world brings many great benefits to Vietnam, the first of which

is FDI In the reconstruction and construction of the country, the rational use of this capital will help economic growth But opening up also makes Vietnam much influenced by the rest of the world such as high inflation Within the scope of this study, we will find out how population, inflation, and FDI affect Vietnam's

economic growth

2 Research questions

(1) What factors affect GDP growth?

(2) How can those factors affect GDP growth?

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III METHODOLOGY

1 Model and data

a Describe the variables

Variabl

Dependen Gross domestic World

GDP product (Trillion Bank

t variable

USD) indicator Unemployment World

rate (%)

indicator Foreign Direct

Investment, net

inflows (Trillion variables indicator

USD)

World INF Inflation rate (%) (+)/(-) Bank

indicator

b Describe the data

Collected data shows information of basic factors related to the

growth of an economy: GDP, unemployment rate, foreign direct investment

indicator and inflation rate by year

Data collections: We use data sources on the US index from 1970 to 2019 which are collected by the World Bank indicator – a verified source that is highly

accurate and runs a model in EVIEW

c Research models

Applying the least squares method (Least Square) to run linear regression

to measure the impact of factors such as direct investment (FDI), unemployment rate (UNR), inflation (INF) on Gross Product domestic (GDP)

d Equation

GDP = β 0 + β 1 UNR + β 2 FDI + β 3 INF + u 2

Sample regression model:

To test the influence of factors on GDP, we applied the theoretical basis and computing these models:

(1) GDP = β 0 + β 1 UNR + u

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(2) GDP = β 0 + β 1 FDI + u

u

β 2 FDI + β 3 INF + u

β 2 INF + β 3 UNR*INF + u

β 2 FDI + β 3 INF + β 4 UNR*INF + u

ESTIMATE RESULT:

Dependent variable: GDP

Var (1) (2) (3) (4) (5) (6)

C 14.774 3.572 14.269 4.820 21.743 3.960

(***) (***) (***) (**) (***) UNR -0.963 0.200 -1.197 0.322

(*) FDI 38.035 33.388 33.635

(***) (***) (***) INF -1.367 -0.464 -2.499 -0.221

(***) (***) (**)

R-sq 0.062 0.774 0.426 0.811 0.462 0.812

Adj R-sq 0.043 0.769 0.414 0.799 0.427 0.795

P-value 0.081 0.000 0.000 0.000 0.000 0.000 (F-test)

RMSE 5.822 2.856 4.555 2.612 4.408 2.609 MAE 4.958 2.206 3.891 1.900 3.882 1.876 MAPE 131.057 43.532 97.023 38.849 96.609 38.134

[*];[**];[***]: sig at 10%, 5%, 1%

=> The best model is:

GDP =

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Sample result:

3 Test and inference

a Interpret the meaning On average:

b Summary statistics

Summary Statistics, using the observations 1 – 50

Mean 10.70912 6.086333 0.178798 2.675534

Sum 321.2736 182.5900 5.363940 80.26603

b Correlation matrix

GDP 1 0.232 0.808 -0.550

Correlation of dependent variable and independent

variables:

Cor(GDP,UNR) = 0.232 The correlation between GDP and population is not at

the same dimension, with the percentage of 23.2% Cor(GDP,FDI) = 0.808

The correlation between GDP and population is not at the same dimension,

with the percentage of 80.8% Cor(GDP,INF) = -0.550 The correlation between

GDP and population is not at the same dimension, with the percentage of -55%

Comments: In general, the independent variables have a low correlation with

the dependent variable, except for the inflation index variable In addition, the

independent variables including the population variable and the FDI variable have a positive correlation with the

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dependent variable while the inflation index variable has a negative

correlation with the dependent variable

Correlation of independent variable and independent

variables:

Cor(POP,FDI) = 0.828

Cor(POP,INF) = -0.647

Cor(FDI,INF) = -0.369

Comments:

II Descriptive statistics

1 Mean of GDP 59380.07

2 Mean of population 78.53645

4 Mean of inflation rate 54.91613

5 Standard deviation of GDP 56778.58

6 Standard deviation of population 9.303455

7 Standard deviation of FDI 3613.908

8 Standard deviation of inflation rate 117.0795

9 Covariance of GDP and population 413363.183

10 Covariance of GDP and FDI 186438261.539

11 Covariance of GDP and inflation rate -1604314.312

12 Covariance of population and FDI 26929.969

13 Covariance of population and inflation rate -681.482

14 Covariance of FDI and inflation rate -151285.638

15 Correlation between GDP and population 0.808

16 Correlation between GDP and FDI 0.938

17 Correlation between GDP and inflation rate -0.249

18 Correlation between population and FDI 0.827

19 Correlation between population and inflation -0.646

rate

20 Correlation between FDI and inflation rate -0.369

21 Test for Normality of GDP => Jacque Bera p- 0.027 (<0.05)

22 Test for Normality of population =>Jacque 0.399 (>0.05)

Bera p-value (Normality)

23 Test for Normality of FDI => Jacque Bera p- 0.072 (>0.05)

24 Test for Normality of inflation => Jacque Bera 0.000 (<0.05)

p-value (Not normality)

25 Test for equality in Mean of GDP and 0.000 (<0.05)

population (Not equal)

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=> p-value of T-test

26 Test for equality in Mean of GDP and FDI => 0.000 (<0.05) p-value of T-test (Not equal)

27 Test for equality in Mean of GDP and inflation 0.000 (<0.05)

=> p-value of T-test (Not equal)

28 Test for equality in Mean of population and 0.000 (<0.05) FDI => p-value of T-test (Not equal)

29 Test for equality in Mean of population and 0.000 (<0.05) inflation => p-value of T-test (Not equal)

30 Test for equality in Mean of FDI and inflation 0.000 (<0.05)

=> p-value of T-test (Not equal)

31 Test for equality in Variance of GDP and 0.000 (<0.05) population => p-value of F-test (Not equal)

32 Test for equality in Variance of GDP and FDI 0.000 (<0.05)

=> p-value of F-test (Not equal)

33 Test for equality in Variance of GDP and 0.000 (<0.05) inflation => p-value of F-test (Not equal)

34 Test for equality in Variance of population and 0.000 (<0.05) FDI => p-value of F-test (Not equal)

35 Test for equality in Variance of population and 0.000 (<0.05) inflation => p-value of F-test (Not equal)

36 Test for equality in Variance of FDI and 0.000 (<0.05) inflation => p-value of F-test (Not equal)

Regress URATE on POP, INF, GDP,

and FDI (intercept is included)

1 Estimated intercept

-170723.8

2 Test for significant of intercept B Reject Ho, significant

A Reject Ho, insignificant P-value= 0.0071 <0.05

B Reject Ho, significant

C Not reject Ho, insignificant

D Not reject Ho, significant

3 Test for significant of slope of POP

A Reject Ho, insignificant (P-value = 0.0055<0.05)

4 Test for significant of slope of FDI

A Reject Ho, insignificant (P-value = 0.0000 <0.05)

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5 Test for significant of slope of INF B Reject Ho, significant

A Reject Ho, insignificant (P-value = 0.0020 <0.05)

6 Adjusted coefficient of determination

0.910742

7 Testing for overall significant, P- [0.0000] ***

value

8 Testing for overall significant

A Reject Ho, insignificant (0.0000<0.05)

C False, P-value= 0.0060

9 Whether coefficient of POP is double

of FDI ? < 0.05

A True, P-value < 0.05

B True, P-value > 0.05

C False, P-value < 0.05

D False, P-value > 0.05

Run model log-linear of GDP on

POP, INF, FDI

10 Covariance of 4 estimated slopes Cov(POP,INF)= -681.4823

Cov(POP,FDI)=

26929.9694

11 The first residual = 28894.25170

12 The first fitted value = -14799.5638

III Summary many model [*];[**];[***]: sig at 10%, 5%, 1%

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Var C(1) C(2) C(3) C(4) C(5) C(6)

C -328194.2 10659 66021.5 - - -168067.4

[000.00]* 24 9 170723 486738.9 [0.0081]*

** [0.036 [0.0000 8 [0.0000]* **

9]** ]*** [0.0071 **

]***

POP 4934.960 2366.5 6799.402 2353.783

[000.00]* 02 [0.0000]* [0.0059]*

]***

FDI 14.750 11.252 11.44394

[0.000 [0.0000 **

0]*** ]***

INF - 128.96 392.5667 1052.671

120.939 14 [0.8014] [0.2752]

4 [0.0020 [0.1761 ]***

]

[0.9158]

R-sq 0.653863 0.8815 0.06219 0.9196 0.782371 0.922523

Adj R- 0.641927 0.8774 0.02985 0.9107 0.758190 0.910604

RMSE 32861.57 19226 54090.5 15831 26056.89 15547.12

MAE 28209.56 15432 44651.3 11583 20895.08 12092.45

75.78666 32.53211 MAPE 81.96313 43.422 173.232 34.011

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