The relationship between FDI and exports

Your unique assignment data file contains data on (FDI): FDI stocks (millions US$); EX: exports (millions US$); POP: population

(thousands); and YSC: average number of years of schooling, for 70 countries, 30 High to Middle income countries (H) and 40 less

developed countries (L). Each file contains data for China, the US and the UK but other countries vary across files. Data are given

for three years, 1995, 2007 and 2016 for FDI, EX and POP and for 1995, 2005, and 2010 for YSC.

Use the data on FDI per capita and exports per capita that you calculated for the A&P assignment to answer the following:

A. Calculate 95% and 99% confidence intervals for FDI per capita (FDIpc) and exports per capita (EXpc) for 2007, for the entire

sample and for the H and L groups separately. Report your results in Table A using the template below. Comment on the results,

highlighting differences between the H and L groups. (10%)

B. Test the hypothesis that there is no significant difference in FDI per capita and exports per capita between the H and L groups

for each of the three years, 1995, 2007 and 2016. Report your results in Table B using the template below. Comment on the test

results and on any differences through time. (30%)

In the analysis below use YSC for 2005 in the analysis for 2007 and YSC 2010 in the analysis for 2016.

C. Calculate the correlations between FDI per capita, exports per capita and YSC for 2007 for the whole sample, and the H and L

samples. Report your results in the Table C template below. Comment on the correlations across variables and country groups. (10%)

D. Perform the following regressions:
(i) ln(EXpc) on ln(FDIpc) for each of the years, 1995, 2007 and 2016
(ii) ln(EXpc) on ln(FDIpc) and YSC for each of the years
(iii) ln(EXpc) on ln(FDIpc) and YSC for each of the years for the H sample
(iv) ln(EXpc) on ln(FDIpc) and YSC for each of the years for the L sample

Report your results in columns (i)-(iv) in the Table D template below. Comment on the coefficient values, significance of the

coefficients, R2 and adjusted R2 and how these change over time. (40%)

E. Finally perform a regression of ln(EXpc) on ln(FDIpc) and YSC and a Dummy variable (Dtype) taking the value 1 if the country is

type H and 0 if the country is type L, for each of the years. Report your results in column (v) in the Table D template below.

Comment on the significance of Dtype and its interpretation and compare the results from this regression with those of (ii) in Part

D. (10%)

The assignment should contain no more than 1500 words excluding Tables and Charts.

The assignment should be independent work. Plagiarism in this assignment would be that students copy from each other – if detected

this could result in a zero mark or more serious consequences.

Assessment Criteria

Understanding of statistical methods:
Demonstrate comprehension of the methods employed.

Application of statistical methods

Demonstrate an ability to apply the statistical methods to data.
Demonstrate an ability to interpret the results.

Presentation

The tables must be presented using the template formats below and must not be direct copies of tables from SPSS output files.

Values should be rounded to at most 3 decimal places.

Table A. Confidence Intervals

FDI per capita Exports per capita
Whole sample H countries L countries Whole sample H countries L countries
2007
95% Upper
Lower

99% Upper
Lower

Table B. Hypothesis Tests

1995 2007 2016
FDI per capita
Mean difference
Std error difference
t-ratio

Exports per capita
Mean difference
Std error difference
t-ratio

Table C. Correlations. (Note only complete the lower part of each panel)
FDI per capita Exports per capita YSC
Whole sample
FDI per capita 1
Exports per capita 1
YSC 1

H countries
FDI per capita 1
Exports per capita 1
YSC 1

L countries
FDI per capita 1
Exports per capita 1
YSC 1
*significant at 95%, **significant at 99%

Table D. Regression Results, 1995.
Whole sample
(i) Whole sample (ii) H countries (iii) L countries (iv) Whole sample
(v)
Intercept
Coefficient
(t-ratio)

FDI per capita
Coefficient
(t-ratio)

YSC
Coefficient –
(t-ratio)

Dtype
Coefficient – – – –
(t-ratio)

R2
Adjusted R2

Report similar Tables for 2007 and 2016

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