ASSIGNMENT ON ECONOMETRICS TOPIC DETERMINANTS OF VIETNAMS 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 af

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

Hanoi, 2021

No Full name - ID Contribution %

1 Nguyễn Hà Anh -

2 Nguyễn Thanh

3 Phạm Minh Thăng

4 Thái Việt Trung -

%

INDEX

1 INTRODUCTION 3

1.1 Problem 3

1.2 Research questions 3

2 THEORY 3

2.1 Marxian theory of unemployment 3

2.2 Basic concepts 3

2.3 Related researches 4

3 METHODOLOGY 6

3.1 Model and data 6

a Describe the variables 6

b Describe the data 7

c Equation 7

3.2 Sample regression model 7

3.3 Test and inference 9

a Interpret the meaning 9

b Summary statistics and correlation matrix 10

c Multicollinearity 12

d Ramsey 12

e Normality 12

f Heteroscedasticity 13

3.4 Verification of hypothesis 13

a Are the results consistent with the theory? 13

b Are regression coefficients statistically significant? 13

c Statistic for overall significant 15

4 COMMENT 15

5 CONCLUSION 16

5.1 Summary our work 16

5.2 Summary of answering the question 17

5.3 Recommend 17

5.4 Limitation 18

6 REFFERENCE 19

7 APPENDIX 19

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?

III METHODOLOGY

1 Model and data

a Describe the variables

Variabl

Expect

ed sign

Data source

Referenc e

Dependen

t variable GDP

Gross domestic product (Trillion USD)

World Bank indicator

Independe

nt

variables

UNR Unemployment

rate (%) (-)

World Bank indicator

FDI

Foreign Direct Investment, net inflows (Trillion USD)

(+)

World Bank indicator

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

World 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  + β UNR + β FDI + β INF + u  0 1 2 3

2 Sample regression model:

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

u

(2) GDP = β + β FDI + 0 1

u

u

β 2 FDI + β INF + u 3

β 2 INF + β UNR*INF + u 3

β 2 FDI + β INF + β UNR*INF + u 3 4

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(***)

(***) -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

(F-test)

0.081 0.000 0.000 0.000 0.000 0.000 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 =

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

Median 10.41708 5.715000 0.151714 2.815795

Maximum 18.23830 9.630000 0.511434 5.397956

Minimum 4.579631 3.990000 0.030310 -0.355546

Std Dev. 4.208661 1.462418 0.123748 1.231244

Skewness 0.179079 0.913137 0.673643 -0.224151

Kurtosis 1.729672 3.140404 2.765325 3.490673

Jarque-Bera 2.177514 4.193740 2.337812 0.552167

Probability 0.336635 0.122840 0.310707 0.758750

Sum 321.2736 182.5900 5.363940 80.26603

Sum Sq Dev. 513.6720 62.02130 0.444095 43.96291

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

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

3 Mean of FDI 3302.885

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

rate

-0.646

20 Correlation between FDI and inflation rate -0.369

21 Test for Normality of GDP => Jacque Bera

p-value (Not normality)0.027 (<0.05)

22 Test for Normality of population =>Jacque

Bera p-value 0.399 (>0.05)(Normality)

23 Test for Normality of FDI => Jacque Bera

p-value 0.072 (>0.05)(Normality)

24 Test for Normality of inflation => Jacque Bera

p-value (Not normality)0.000 (<0.05)

25 Test for equality in Mean of GDP and

population

0.000 (<0.05) (Not equal)

=> p-value of T-test

26 Test for equality in Mean of GDP and FDI =>

p-value of T-test 0.000 (<0.05)(Not equal)

27 Test for equality in Mean of GDP and inflation

=> p-value of T-test 0.000 (<0.05)(Not equal)

28 Test for equality in Mean of population and

FDI => p-value of T-test 0.000 (<0.05)(Not equal)

29 Test for equality in Mean of population and

inflation => p-value of T-test

0.000 (<0.05) (Not equal)

30 Test for equality in Mean of FDI and inflation

=> p-value of T-test 0.000 (<0.05)(Not equal)

31 Test for equality in Variance of GDP and

population => p-value of F-test

0.000 (<0.05) (Not equal)

32 Test for equality in Variance of GDP and FDI

=> p-value of F-test 0.000 (<0.05)(Not equal)

33 Test for equality in Variance of GDP and

inflation => p-value of F-test

0.000 (<0.05) (Not equal)

34 Test for equality in Variance of population and

FDI => p-value of F-test

0.000 (<0.05) (Not equal)

35 Test for equality in Variance of population and

inflation => p-value of F-test 0.000 (<0.05)(Not equal)

36 Test for equality in Variance of FDI and

inflation => p-value of F-test

0.000 (<0.05) (Not equal)

Regress URATE on POP, INF, GDP,

and FDI (intercept is included)

1 Estimated intercept

-170723.8

2 Test for significant of intercept

A Reject Ho, insignificant

B Reject Ho, significant

C Not reject Ho, insignificant

D Not reject Ho, significant

B Reject Ho, significant P-value= 0.0071 <0.05

3 Test for significant of slope of POP

A Reject Ho, insignificant

B Reject Ho, significant

C Not reject Ho, insignificant

D Not reject Ho, significant

B Reject Ho, significant (P-value = 0.0055<0.05)

4 Test for significant of slope of FDI

A Reject Ho, insignificant

B Reject Ho, significant

B Reject Ho, significant (P-value = 0.0000 <0.05)

C Not reject Ho, insignificant

D Not reject Ho, significant

5 Test for significant of slope of INF

A Reject Ho, insignificant

B Reject Ho, significant

C Not reject Ho, insignificant

D Not reject Ho, significant

B Reject Ho, significant (P-value = 0.0020 <0.05)

6 Adjusted coefficient of determination

0.910742

7 Testing for overall significant,

P-value

[0.0000] ***

8 Testing for overall significant

A Reject Ho, insignificant

B Reject Ho, significant

C Not reject Ho, insignificant

D Not reject Ho, significant

B Reject Ho, significant (0.0000<0.05)

9 Whether coefficient of POP is double

of FDI ?

A True, P-value < 0.05

B True, P-value > 0.05

C False, P-value < 0.05

D False, P-value > 0.05

C False, P-value= 0.0060

< 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%

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

C -328194.2

[000.00]*

**

10659

24 [0.036 9]**

66021.5 9

[0.0000 ]***

-170723 8 [0.0071 ]***

-486738.9 [0.0000]*

**

-168067.4 [0.0081]*

**

POP 4934.960

[000.00]*

**

2366.5 02 [0.0055 ]***

6799.402 [0.0000]*

**

2353.783 [0.0059]*

**

FDI 14.750

99 [0.000 0]***

11.252 32 [0.0000 ]***

11.44394 [0.0000]*

**

-120.939 4

[0.1761 ]

128.96 14 [0.0020 ]***

392.5667 [0.8014]

1052.671 [0.2752]

POP*IN

[0.9158]

-14.59944 [0.3367]

R-sq 0.653863 0.8815

11

0.06219 1

0.9196 68

0.782371 0.922523

Adj

R-sq

0.641927 0.8774

25 0.029853 0.910742 0.758190 0.910604 RMSE 32861.57 19226

66

54090.5 6

15831

00

26056.89 15547.12

MAE 28209.56 15432

58 44651.38 11583.09 20895.08 12092.45 MAPE 81.96313 43.422

56

173.232 6

34.011 73

75.78666 32.53211