(LUẬN văn THẠC sĩ) foreign direct investment, financial development and economic growth in asian developing countries

INSTUTION OF SOCIAL STUDIES UNIVERSITY OF ECONOMICS HO CHI MINH CITY THE HAGUE VIETNAM THE NETHERLANDS VIETNAM- NETHERLANDS PROGRAMME FOR M.A IN DEVELOPMENT ECONOMICS FOREIGN DIRECT INVESTMENT, FINANCIAL DEVELOPMENT AND ECONOMIC GROWTH IN ASIAN DEVELOPING COUNTRIES A thesis submitted in partial fulfilment of the requirements for the degree of MASTER OF ARTS IN DEVELOPMENT ECONOMICS By NGUYEN THUC DUY ANH Academic Supervisor: DR NGUYEN VAN PHUC HO CHI MINH CITY, DECEMBER 2011 CERTIFICATION I hereby certify that the substance of the thesis has not already been submitted for any degree and is not being currently submitted for any other degree I also certify that, to the best of my knowledge, and help received in preparing the thesis and all sources used have been acknowledged in the thesis Signature Nguyen Thuc Duy Anh Date: TIEU LUAN MOI download : skknchat@gmail.com ACKNOWLEDGMENTS I would like to express my gratitude to all those who gave me the possibility to complete this thesis I am deeply grateful to my supervisor Dr Nguyen Van Phuc from Ho Chi Minh City Open University whose support, stimulating suggestions and encouragement • helped me in all the time of research for and writing of this thesis I am also very grateful to all lecturers of the Vietnam-Netherlands Programme for giving me knowledge and guidance to fulfill the M.A Programme I would like to thank all the members of the Vietnam-Netherlands Program, especially, VNP Library for helping me to have necessary documents and research papers during my completion of the thesis Finally, I am indebted to my parents and my dear husband whose love, sympathy and encouragement enabled me to complete this thesis I am also thankful to my classmates for their warm encouragement ; 11 TIEU LUAN MOI download : skknchat@gmail.com ACRONYMS AND ABBREVIATIONS • FDI Foreign Direct Investment FINANCE Financial Development WDI World Development Indicators WGI Worldwide Governance Indicators UNCTAD United Nations Conference on Trade and Development OECD Organization for Economic Cooperation and Development • MNCs Multinational Enterprises M&A Mergers and Acquisitions R&D Research and Development POOLED Pooled Regression Model FEM Fixed Effects Regression Model REM Random Effects Regression Model OLS Ordinary Least Square • 111 TIEU LUAN MOI download : skknchat@gmail.com ABSTRACT This research investigates the role of domestic financial development plays in enhancing FDI's positive effects on economic growth in Asian developing countries In other words, we examine whether countries with better domestic financial system can utilize FDI more efficiently The empirical analysis uses balanced panel data of24 Asian developing countries in the period 1995-2009 This research applies the various models and techniques in panel data regression Linear static models for panel data named constant coefficients model or pooled regression model (POOLED), fixed effects regression model (FEM) and random effects regression model (REM) are employed We analyze all models and employ many kinds of test including poolability test, Hausman test, LM test, fixed effects tests and Wald tests to select the most appropriated estimated model The research findings show that FDI alone does not have directly effect on economic growth but does have when combined with financial development Well-developed domestic financial markets promote the process of technological diffusion associated with FDI in Asian developing countries Therefore, FDI and domestic financial development are complementary in increasing the rate of economic growth in the region There is a threshold level of domestic financial development above which FDI starts to have positive impacts on economic growth • lV TIEU LUAN MOI download : skknchat@gmail.com I - TABLE OF CONTENTS CHAPTER INTRODUCTION 1.1 Problem statement 1.2 Research objectives 1.3 Research questions 1.4 Research scope and data 1.5 Organization ofthe thesis CHAPTER LITERATURE REVIEW 2.1 The impact ofFDI on economic growth 2.2 FDI, financial development and economic growth: theoretical framework and • empirical studies 10 2.2.1 Theoretical framework 10 2.2.1.1 Neoclassical growth model 10 2.2.1.2 Endogenous growth model 11 2.2.1.3 Technological change model 11 2.2.2 Empirical studies about the role of financial development in FDIGrowth nexus 15 2.3 The measures of financial development 21 2.4 The determinants of economic growth 23 Chapter remark CHAPTER RESEARCH METHODOLOGY 27 • 3.1 Variables measurements 27 3.1.1 Dependent variable: Economic growth (GROWTH) 27 v TIEU LUAN MOI download : skknchat@gmail.com (LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries - - (LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries 1.2 Independent variables 27 3.1.3 Control variables (CONTROLS) 31 3.2 Data collection 33 3.3 The estimation strategy 34 3.3 Panel regression models 3.3.1.1 Constant coefficients model (POOLED) 35 3.3 1.2 Fixed effects regression model (FEM) 3.3.1.3 Random effects regression model (REM) 37 3.3.2 Choice of panel regression model (Testing panel models) 38 3.3.2.1 The F-Test for individual and time effects in FEM models: 38 3.3.2.2 The Chow Test for the POOLED against the FEM (Test for poolability): 39 3.3.2.3 The Hausman Specification Test for the FEM against the REM 39 3.3.2.4 The Breusch-Pagan (1980)- Lagrange Multiplier (LM) Test for the POOLED against the REM 40 3.3.3 Testing assumptions of the error term 41 3.3.4 Model specification 41 3.4 Summary of the analytical methods 43 3.5 Hypothesis statements 43 CHAPTER RESEARCH RESULTS 45 4.1 The descriptive statistics of the sample 45 4.2 Empirical results 46 4.2.1 Examining the impact ofFDI, on its own, on economic growth 46 4.2.1.1 Choosing the appropriate model 47 Vl TIEU LUAN MOI download : skknchat@gmail.com (LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries (LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries 4.2.1.2 Test for heteroskedasticity 48 4.2.1.3 Results discussion 50 4.2.2 Examining the role of financial development in FDI-Growth nexus 51 4.2.2.1 Choosing the appropriate model 52 4.2.2.2 Test for heteroskedasticity 53 4.2.2.3 Results discussion 55 4.3 Chapter remark 62 CHAPTER CONCLUSION AND RECOMMENDATION 64 5.1 Conclusion 64 5.2 Recommendation 66 5.3 Research limitation and suggestion for further study 68 REFERENCES 70 APPENDIX A LIST OF ASIAN DEVELOPING COUNTRIES A-1 APPENDIX B DATA SOURCES AND DESCRIPTIVE STATISTICS B-2 APPENDIX C PANEL MODEL TESTS C-1 APPENDIX D REGRESSION MODEL RESULTS D-11 Vll TIEU LUAN MOI download : skknchat@gmail.com (LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries Test for timeftxed effects: Figure C-16: Test for time fixed effects in the FEM modella -using LL Y ( ( ( ( 1) 2) 3) 4) ( 5) ( 6) ( 7) ( 8) ( 9) (10) (11) (12) (13) (14) Iyear_1996 Jyear_l997 Jyear_1998 Jyear_1999 Iyear_.2000 Jyear_.2001 Jyear_.2002 Iyear_.2003 Iyear_.2004 Iyear_.2005 lyear_.2006 Iyear_.2007 Jyear_.2008 Jyear_.2009 F( 14 = = = = = = = = = = = = = = Prob > F c 1) 0 0 0 0 0 0 0 311) = I = Figure C-15: Test for time fixed effects in the FEM model2b- using PRIVATECREDIT ( 2) ( 3) ( 4) c 5) ( 6) ( 7) ( 8) 9) c (10) (11) (12) (13) (14) 6_28 0.0000 Jyear_1996 Jyear_1997 Iyear_1998 Jyear_1999 Iyear_.2000 Jyear_.2001 Jyear_.2002 Iyear_.2003 Iyear_.2004 Iyear_.2005 Jyear_.2006 Jyear_.2007 Jyear_.2008 Iyear_.2009 = =0 = =0 = = =0 = 0 =0 =0 = =0 =0 = 311) = F( 14, Prob > F = 5.80 0.0000 Heteroskedasticity Tests for Two-way FEM Regressions Models Figure C-17: HET Test for the REM mode/1 ikelihood-ratio test (Assumption: Restricted nested in Unrestricted) LR chi (23) Prob > chi2 Figure C-18: HET Test for the Two-way FEM Madella - using LL Y Modified Wald test for groupwise heteroskedasticity in fixed effect regression model HO: sigma(i)A2 = sigmaA2 for all i chi2 (24) = Prob>chi2 = 1314_79 0.0000 Figure C-19: HET Test for the Two-way FEM Mode/2b- using PRIVATECREDIT Modified Wald test for groupwise heteroskedasticity in fixed effect regression model HO: sigma(i)A2 = sigmaA2 for all i chi P (24) r'ob>chi 1239.9.1 = o_oooo C-10 TIEU LUAN MOI download : skknchat@gmail.com 249.26 0.0000 (LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries - - - (LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries APPENDIX D REGRESSION MODEL RESULTS Figure D-1: The REM mode/1 with Robust Standard Errors Number of obs Number of groups Random-effects GLS regression Group variable: country " R-sq: within between overall corr(u_i, X) 360 24 = = Obs per group: = avg = = 0.1578 = 0.3132 = 0.1939 15 15.0 15 max = Wald chi2(9) Prob > chi2 = (assumed) 83.80 0.0000 = = (Std Err adjusted for' 24 clusters in country) GROWTH Coef Robust Std Err FDI iGDP INVEST OPENNESS GOVEXP POP INFLATION EDUC GOVEFF _cons 044383 -.921372 1109555 1.164496 -.2014226 -.7634579 -.0315076 0436342 2446693 4.056647 096054 5800785 0603592 1.017392 0829336 456565 0070633 0276181 1.18712 7.325578 sigma_u sigma_e rho 1.110122 3.6654267 08401922 (fraction of variance due to u_i) z 0.46 -1.59 1.84 1.14 -2.43 -1.67 -4.46 1.58 0.21 0.55 P>lzl 0.644 0.112 0.066 0.252 0.015 0.094 0.000 0.114 0.837 0.580 [95% Conf Interval] -.1438794 -2.058305 -.0073463 -.8295569 -.3639695 -1.658309 -.0453514 -.0104962 -2.082044 -10.30122 2326453 2155609 2292573 3.158548 -.0388757 1313931 -.0176637 0977647 2.571383 18.41452 , D-11 TIEU LUAN MOI download : skknchat@gmail.com (LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries (LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries Figure D-2: The Two-way FEM Regression Model 2a with Robust Standard Errors- using LLY Number of obs = 360 F( 25, 311) = 6.86 Prob > F = 0.0000 R-squal'ed 0.5824 = Adj R-squal'ed = 0.5179 Root MSE 3.203 = Linear regression, absorbing indicators GROWTH Coef Robust Std En FDI LLY FDixLLY iGDP INVEST OPENNESS GOVEXP POP INFLATION EDUC GOVEFF _Iyear_1996 _Iyear_1997 _Iyear_1998 _Iyear·_1999 _Iyear_2000 _Iyear_2001 _Iyear_2002 _Iyear_2003 _Iyear·_2004 _Iyear_2005 _Iyeal'_2006 _Iyear_2007 _Iyear_2008 _Iyear_2009 _cons -.2579394 -.060756 0037706 -7.460473 1306783 4.364267 -.2005144 6537246 -.040748 0063268 2.529694 -.0875398 -.3785189 -1.941111 -.5473965 7409255 1010817 1.450658 2.77038 3.560317 3.663711 4.809626 5.752941 3.793493 4679464 37.86814 0923979 0236118 0010214 2.901285 043795 1.747161 1197131 511516 0073417 0299537 1.257938 9490902 9633381 1.050055 1.019555 940828 1.060464 1.026825 1.058166 1.12246 1.318707 1.514717 1.46837 1.704235 738655 17.6363 country absorbed t (95% Conf Interval] P>ltl -2.79 -2.57 3.69 -2.57 2.98 2.50 -1.67 1.28 -5.55 0.21 2.01 -0.09 -0.39 -1.85 -0.54 0.79 0.10 1.41 2.62 3.17 2.78 3.18 3.92 2.23 0.27 2.15 0.006 0.011 0.000 0.011 0.003 0.013 0.095 0.202 0.000 0.833 0.045 0.927 0.695 0.065 0.592 0.432 0.924 0.159 0.009 0.002 0.006 0.002 0.000 0.027 0.788 0.033 -.4397436 -.1072151 0017609 -13.1691 0445064 9265162 -.4360644 -.3527452 -.0551937 -.0526108 0545497 -1.95499 -2.274003 -4.007221 -2.553494 -1.110268 -1.98551 -.5697447 6883111 1.35174 1.068996 1.829237 2.863744 4402045 -2.953068 3.166594 -.0761353 -.0142969 0057802 -1.7518421 2168502 7.802017 0350356 1.660194: -.0263023 0652644 5.004839 1.77991 516966 1249995 1.458701 592119 2.187673 3.47106 4.852449 5.768894 6.258426 7.790016 8.642137 7.146782 3.888961 72.56969 (24 categories) ~ -~ - - Figure D-3: The Wald Test on joint significance of POP in the Two-way FEM Model 2a -using LL Y test POP ( 1) POP = F( 1, 311) Prob > F = = 1.63 0.2022 • D-12 TIEU LUAN MOI download : skknchat@gmail.com (LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries (LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries Figure D-4: The Two-way FEM Regression Madella with Robust Standard Errors- using LLY after eliminating POP Number of obs F( 24, 312) Prob > F R-squared Adj R-squared Root MSE Linear regression, absorbing indicators , GROWTH Coef Robust Std Err FDI LLY FDixLLY iGDP INVEST OPENNESS GOVEXP INFLATION EDUC GOVEFF _Iyear·_l996 _Iyear_l997 _Iyear_l998 _Iyear_1999 _Iyear_2000 _Iyear_2001 _Iyear_2002 _Iyear_2003 _Iyear_2004 _Iyear_2005 _Iyear_2006 _Iyear_2007 _Iyear_2008 _Iyear_2009 _cons -.2467751 -.0611298 0036947 -6.834686 1329217 4.114813 -.2056224 -.0409213 0060879 2.784116 -.1301899 -.448146 -2.018622 -.6499046 6220635 -.0281213 1.297167 2.61226 3.402253 3.46758 4.520441 5.374294 3.365265 -.0070936 35.85051 090422 0234052 0010048 2.854349 0436247 1.707731 1195829 0070627 0313833 1.247458 934478 9591465 1.037569 1.001266 9100522 1.042639 1.007889 1.036828 1.097374 1.294105 1.472139 1.42028 1.641883 1.675401 17.49612 country absor·bed t -2.73 -2.61 3.68 -2.39 3.05 2.41 -1.72 -5.79 0.19 2.23 -0.14 -0.47 -1.95 -0.65 0.68 -0.03 1.29 2.52 3.10 2.68 3.07 3.78 2.05 -0.00 2.05 -.4246892 -.1071817 0017176 -12.45089 0470858 7546861 -.4409133 -.0548179 -.0556617 3296213 -1.968866 -2.335359 -4.060139 -2.619992 -1.168552 -2.079615 -.6859515 5721997 1.243063 921304 1.623866 2.579756 1347016 -3.303607 1.425206 -.068861 -.0150778 0056718 -1.218479 2187575 7.474939 0296686 -.0270248 0678375 5.238611 1.708486 1.439067 0228948 1.320183 2.412679 2.023372 3.280286 4.652319 5.561442 6.013856 7.417016 8.168831 6.595829 3.28942 70.2758 (24 categories) - - Figure D-5: The Wald Test on joint significance of EDUC in the Two-way FEM Model 2a -using LL Y • test EDUC ( 1) EDUC F( 360 7.18 0.0000 0.5803 5171 3.2059 [95% Conf Interval] P>ltl 0.007 0.009 0.000 0.017 0.003 0.017 0.087 0.000 0.846 0.026 0.889 0.641 0.053 0.517 0.495 0.978 0.199 0.012 0.002 0.008 0.002 0.000 0.041 0.997 0.041 = = = = = = =0 1, 312) = Pr~ob > F = 0.04 0.8463 D-13 TIEU LUAN MOI download : skknchat@gmail.com (LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries (LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries Figure D-6: The Two-way FEM Regression Model 2b with Robust Standard Errors-using PRIVATECREDIT Number of obs = 360 F( 25, 311) = 6.63 Prob > F = 0.0000 R-squared 5761 = Adj R-squared = 5107 Root MSE 3.227 = Linear regression, absorbing indicators GROWTH Coef Robust Std Er'r FDI FDixPRIVAT-T iGDP INVEST OPENNESS GOVEXP POP INFLATION EDUC GOVEFF _Iyear_l996 _Iyear_l997 _Iyear_l998 _Iyear_l999 _Iyear_2000 _Iyeat'_2001 _Iyear_2002 _Iyear·_2003 _Iyear_2004 _Iyear·_2005 _Iyear_2006 _Iyear·_2007 _Iyear_2008 _Iyear·_2009 _cons -.2265723 -.0528343 0047063 -7.410809 144302 4.065401 -.2247779 5503388 -.0411492 0027775 2.486295 -.1314264 -.3712222 -2.113059 -.9192629 3342861 -.4361131 8086782 2.188864 2.989104 3.240965 4.341027 5.25256 3.339857 -.1229632 38.34295 0976368 0222776 0016475 2.877987 0483589 1.671793 1200745 5429731 007697 0315651 1.21862 1.006511 9837842 1.046351 1.041934 9480375 1.039433 1.004106 1.048949 1.113439 1.298892 1.511326 1.45962 1.70855 1.782405 16.85323 countr·y absorbed PRIVATECRE~T t [95% Conf Interval] P>ltl -2.32 -2.37 2.86 -2.57 2.98 2.43 -1.87 1.01 -5.35 0.09 2.04 -0.13 -0.38 -2.02 -0.88 0.35 -0.42 0.81 2.09 2.68 2.50 2.87 3.60 1.95 -0.07 2.28 0.021 0.018 0.005 0.010 0.003 0.016 0.062 0.312 0.000 0.930 0.042 0.896 0.706 0.044 0.378 0.725 0.675 0.421 0.038 0.008 0.013 0.004 0.000 0.052 0.945 0.024 -.4186846 -.0966682 0014646 -13.0736 04915 775946 -.461039 -.5180265 -.0562939 -.0593306 0885127 -2.111859 -2.306937 -4.171881 -2.969393 -1.531093 -2.481323 -1.167021 124929 7982777 6852368 1.367311 2.380581 -.0219223 -3.630061 5.182178 -.03446 -.0090004 007948 -1.748022 2394541 7.354856 0114832 1.618704 -.0260044 0648855 4.884077 1.849006 1.564492 -.0542372 1.130868 2.199665 1.609097 2.784378 4.252798 5.17993 5.796693 7.314743 8.124538 6.701636 3.384135 71.50371 (24 categories) Figure D-7: The Wold Test on joint significance of POP in the Two-way FEM Model2b- using PRIVATECREDIT • test POP ( 1) POP = F( 1, 311) Prob > F = 1.03 0.3116 • D-14 TIEU LUAN MOI download : skknchat@gmail.com (LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries (LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries Figure D-8: The Two-way FEM Regression Model 2b with Robust Standard Errors-using PRIVATECREDIT after eliminating POP Number of obs = 360 F( 24, 312) = 6.89 Prob > F 0.0000 = R-squared 0.5746 = Adj R-squared = 0.5106 Root MSE = 3.2275 Linear regression, absorbing indicators • GROWTH Coef Robust std Err FDI iGDP INVEST OPENNESS GOVEXP INFLATION EDUC GOVEFF _ryear_l996 _Iyear_l997 _Iyear_l998 _Iyear_l999 _Iyear_2000 _Iyear_2001 _Iyear_2002 _Iyear_2003 _Iyear_2004 _Iyear_2005 _Iyear'_2006 _ryear_2007 _Iyear·_2008 _Iyear_2009 _cons -.2213065 -.0513155 0047374 -6.968327 1467062 3.840885 -.2278498 -.0413748 0018828 2.73695 -.1690432 -.4311495 -2.172115 -.9990131 2405171 -.5347169 6953581 2.072405 2.875725 3.090106 4.111373 4.943612 2.998962 -.5105703 37.22432 0969968 0220347 0016243 2.847722 0479926 1.627826 1200525 0074481 0325724 1.21093 9844843 970456 1.0369 1.020748 9156043 1.017564 9825771 1.026967 1.09063 1.27609 1.475846 1.413198 1.654077 72131 16.74387 country absorbed PRIVATECRE~T FDixPRIVAT~T t -2.28 -2.33 2.92 -2.45 3.06 2.36 -1.90 -5.56 0.06 2.26 -0.17 -0.44 -2.09 -0.98 0.26 -0.53 0.71 2.02 2.64 2.42 2.79 3.50 1.81 -0.30 2.22 [95% Conf Interval] P>ltl 0.023 0.021 0.004 0.015 0.002 0.019 0.059 0.000 0.954 0.024 0.864 0.657 0.037 0.328 0.793 0.600 0.480 0.044 0.009 0.016 0.006 0.001 0.071 0.767 0.027 -.4121571 -.0946709 0015415 -12.57149 0522761 6379807 -.4640646 -.0560296 -.0622066 3543276 -2.106111 -2.340615 -4.212315 -3.007433 -1.561023 -2.536873 -1.237957 0517487 7298054 5792758 1.207503 2.163009 -.2555937 -3.897414 4.279148 -.0304559 -.0079601 0079334 -1.36516 2411364 7.043789 008365 -.0267201 0659721 5.119572 1.768025 1.478316 -.131915 1.009407 2.042057 1.467439 2.628673 4.093061 5.021644 5.600935 7.015243 7.724216 6.253518 2.876273 70.1695 (24 categories) - Figure D-9: The Wald Test on joint significance of EDUC in the Two-way FEM Mode/2b- using PRIVATECREDIT fl test: EDUC ( 1) EDUC F( =0 1, 312) = Prob > F = 0.00 0.9539 D-15 TIEU LUAN MOI download : skknchat@gmail.com I (LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries (LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries Final regression models: Figure D-10: The final Two-way FEM Regression Modell a -using LL Y inear regression, absorbing indicators Number of obs F( 23, 313) Prob > F R-squared Adj R-squared Root MSE ~ • "' GROWTH Coef Robust Std Err FDI LLY FDixLLY iGDP INVEST OPENNESS GOVEXP INFLATION GOVEFF _Iyear_1996 _Iyear_1997 _Iyear·_l998 _Iyear_l999 _Iyear·_2000 _Iyear_2001 _Iyear_2002 _Iyear·_2003 _Iyear_2004 _Iyear·_2005 _Iyear_2006 _Iyear·_2007 _Iyear_2008 _Iyear·_2009 _cons -.2466713 -.0602514 0036776 -6.867126 1329443 4.118697 -.2067933 -.0409251 2.806065 -.1222713 -.4359639 -1.99895 -.6200958 6571932 0166183 1.350196 2.68078 3.468395 3.548695 4.608533 5.469803 3.468786 0995689 36.37885 0902736 0231229 0010099 2.870681 043507 1.70669 119554 0070175 1.24679 932096 9618854 1.044489 9963094 908384 1.067383 1.005276 1.014971 1.090953 1.269214 1.431801 1.410299 1.640443 1.624664 17.51961 countr·y absorbed t -2.73 -2.61 3.64 -2.39 3.06 2.41 -1.73 -5.83 2.25 -0.13 -0.45 -1.91 -0.62 0.72 0.02 1.34 2.64 3.18 2.80 3.22 3.88 2.11 0.06 2.08 P>ltl 0.007 0.010 0.000 0.017 0.002 0.016 0.085 0.000 0.025 0.896 0.651 0.057 0.534 0.470 0.988 0.180 0.009 0.002 0.005 0.001 0.000 0.035 0.951 0.039 = = 360 7.48 = 0.0000 = 0.5802 = 0.5186 = 3.201 [95% Conf Interval] -.424291 -.1057473 0016905 -12.5154 047341 7606607 -.4420243 -.0547325 3529145 -1.956237 -2.328543 -4.054057 -2.580406 -1.130118 -2.083534 -.6277568 6837505 1.321866 1.051426 1.791361 2.694938 2410967 -3.097075 1.907752 -.0690515 -.0147555 0056647 -1.218855 2185475 7.476733 0284377 -.0271178 5.259215 1.711695 1.456615 0561577 1.340215 2.444504 2.11677 3.328149 4.677809 5.614924 6.045964 7.425705 8.244668 6.696476 3.296213 70.84994 (24 categories) ~ D-16 TIEU LUAN MOI download : skknchat@gmail.com (LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries (LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries(LUAN.van.THAC.si).foreign.direct.investment financial.development.and.economic.growth.in.asian.developing.countries