Trang 1 FOREIGN TRADE UNIVERSITYFACULTY OF INTERNATIONAL ECONOMICS---***---ECONOMETRICS 2 ASSIGNMENTMajor: International EconomicsANALYSE FACTORS OF SUSTAINABLE ECONOMIC GROWTH INSEVEN S
FOREIGN TRADE UNIVERSITY FACULTY OF INTERNATIONAL ECONOMICS *** ECONOMETRICS ASSIGNMENT Major: International Economics ANALYSE FACTORS OF SUSTAINABLE ECONOMIC GROWTH IN SEVEN SOUTHEAST ASIAN COUNTRIES IN 2000-2020 Credit class : KTEE318CLC.1 Group :1 Instructor : PhD Dinh Thi Thanh Binh STT Name ID Contribution 64 Tran Quynh Phuong 2013450236 100% 83 Vu Thu Uyen 2013450065 100% 17 Nguyen Ngoc Ha 2013450014 100% 39 Nguyen Le Mai Linh 2012450021 100% 66 Dinh Hong Quan 2012450031 100% Hanoi, 2022 TABLE OF CONTENT TABLE OF CONTENT TABLE OF FIGURES INTRODUCTION CHAPTER 1: OVERVIEW OF SUSTAINABLE ECONOMIC GROWTH IN SOUTHEAST ASIA CHAPTER 2: THEORETICAL FRAMEWORK 2.1 Theories of sustainable economic growth 2.2 Empirical evidence 8 10 CHAPTER 3: METHODOLOGY AND MODEL SPECIFICATION 3.1 Methodology 3.2 Empirical Model 3.2.1 Model specification 3.2.2 Describe of variables 3.3 Data 3.3.1 Sources of data 3.3.2 Descriptive statistics 12 12 12 12 12 15 15 15 CHAPTER 4: MODEL ESTIMATION 4.1 Model selection test 4.2 Regression results 4.3 Diagnosing and fixing the model’s problem 4.3.1 Model misspecification 4.3.2 Multicollinearity testing 4.3.3 Heteroskedasticity 4.3.4 Serial correlation – autocorrelation 4.3.5 Cross-sectional correlation – autocorrelation 4.3.6 Fixing the defects 18 18 20 21 21 22 23 24 24 25 CHAPTER 5: RESULTS & DISCUSSION 5.1 Results and hypothesis testing 5.2 Interpretations and implications 5.3 Limitations 27 27 28 30 CONCLUSION 30 REFERENCES 31 APPENDIX 35 TABLE OF FIGURES Table Describe of variables 13 Table Descriptive statistics 15 Table Correlation matrix between 16 variables Table Identification of panel data 18 Table Model selection test 18 Table Fixed effect model results 20 Table OLS regression results 21 Table Ramsey RESET test 22 Table Test for multicollinearity 23 Table 10 Wald’s test 24 Table 11 Wooldridge’s test 24 Table 12 Pesaran’s test 25 Table 13 Fixed effect model, cluster 26 Table 14 Significance test results 28 INTRODUCTION Sustainable development is a multifaceted, cross-disciplinary concept The key theoretical approaches of sustainability, according to Van Den Bergh (1996), include Neo-classical economic equilibrium, evolutionary ecology, physico ecology, socio-cultural, and human ecology Similarly, physical or natural sciences such as Environmental Sciences, Botany, Engineering, Zoology, Biology, Geography, Economics, and Sociology are all heavily influenced by the notion Taking into account each and every aspect of the concept of sustainable development is extremely difficult, if not impossible As a result, the current report focuses solely on the economic components of the idea of sustainable development in general, as well as a variety of other factors Economic growth is measured by the Gross Domestic Product (GDP) GDP is defined as the total worth of all final goods and services produced inside a country's borders during a one-year period Southeast Asian countries witnessed remarkable sustainability in economic growth Report "Japanese FDI Trends in Southeast Asian Countries" by Prof Yasuhiro Yamada (2015), Representative of the Institute for East Asian Integration Studies ASEAN–Japan pointed out that Southeast Asia has been the world leader in sustainable economic growth over the past three decades thanks to drastic business environment reforms as well as deep integration into the world economy A lot of work has been done on an international level to estimate the determinants on sustainable economic growth based on different approaches Muhammad Azam et al (2015) examine the influence of environmental degradation, as measured by CO2 emissions per capita, as well as several other explanatory variables such as energy usage, trade, and human capital on economic growth in China, the United States, India, and Japan Hatmanu et al (2020) look at Romanian economic growth with an emphasis on the EU business climate The study places emphasis on the relationship between financial stability and sustainable economic growth It is however interesting to note that few studies have produced conclusive results for Southeast Asian countries Therefore, it is necessary to conduct a study on the actual state of this region Our report selects seven countries namely Vietnam, Thailand, Laos, Cambodia, Philippines, Indonesia, and Malaysia to depict the vision of sustainable economic growth in Southeast Asia during the period from 2000 to 2020 Our research starts a lively conversation about the literature on sustainable economic growth and the factors that influence it The results would offer important insights and aid policy makers of countries to propose suitable mechanisms and policies to move the countries towards sustainable objectives In this report, we draw attention to the scope of Southeast Asia to answer the question: “What are the determinants of sustainable economic growth in selected Southeast Asian countries in the period of 2000-2020?” The plan of the paper is as follows Chapter briefly discusses the overview of sustainable economic growth in Southeast Asia, whereas Chapter discusses the theoretical framework of sustainable economic growth and empirical evidence The methodology and model specifications are illustrated in Chapter Chapter shows our model estimation Then we give results and some discussions in Chapter Finally, we conclude the report During the process of working on the report, limitations are inevitable Thus, we sincerely hope to receive your comments and feedback on our work so that we can better our paper We would like to thank Ph.D Dinh Thi Thanh Binh for your dedication and careful guidance for us throughout the course CHAPTER 1: OVERVIEW OF SUSTAINABLE ECONOMIC GROWTH IN SOUTHEAST ASIA One of the cornerstones of sustainable development, as defined by the Millennium Development Goals, is sustainable economic growth The end of sustainable development does not imply the end of sustainable economic growth Sustainable ecosystems, sustainable consumption of renewable and nonrenewable resources without depriving society of future benefits, sustainable human development, sustainable investment, and innovation are among the basic principles Our research focuses on different countries in Southeast Asia: Indonesia, Cambodia, Lao PDR, Malaysia, Philippines, Thailand, and Vietnam Southeast Asia is long-known for its rich culture and fast-developing economy, especially among ASEAN members ASEAN’s GDP had been on a positive trend through the period of 2000- 2019, notwithstanding the global economic crisis in 2008-2009 The region’s total GDP in 2019 has doubled since a decade ago (USD 1.6 trillion in 2008) and almost fivefold the value in 2000 (US$0.6 trillion) A similar trend was observed for the ASEAN’s GDP per capita, which reached US$4,827.4 in 2019, as compared to 2010 at US$ 3,313.6, and more than four times its value in 2000 (US$1,200.3) ASEAN’s share of world nominal GDP rose from 2.5% in 2008 (the twelfth largest economy) to 3.7% in 2019 (the fifth largest) The main sector of the ASEAN economy from 2005 to 2019 was the services, which include commerce, government operations, communications, transportation, finance, and other economic activity not producing commodities From 46.6 % in 2005 to 50.8 % in 2019, the services sector's contribution to the region's GDP rose In contrast, throughout the same time period, the shares of the other two sectors fell The contribution of industry to the overall GDP in 2019 was 36.0 %, down from 39.7 % in 2005 The industry comprises manufacturing, power, gas, and water supply, construction, as well as mining, and quarrying The share of agriculture, covering farming, fishing, and forestry, also decreased to 10.2% in 2019 (from 12.8% in 2005) Document continues below Discover more from: Economics Trường Đại học… 546 documents Go to course 26 Tiểu luận kinh tế vĩ mơ Economics 36 Ngun LÍ KẾ TỐN BẢN CUỐI Economics 14 100% (4) 6.BẢNG SỐ NGẪU Nhiên Economics 42 100% (6) Tài liệu AUD 402 Document, Tài liệu… Economics 100% (10) 213456154 Kiểm toan va sụp đổ của… Economics 37 94% (51) 100% (3) Vinamilk financial analysis in the 2016-… Economics 100% (3) Services were the leading sector in most ASEAN Member States The share of the sector was found to be the largest in Singapore, reaching 64.8% of the country’s total GDP, followed by Thailand (61.7%), the Philippines (60.6%), and Malaysia (55.0%) Agriculture remained an important sector for Cambodia (16.7%), Lao PDR (14.5%), Viet Nam (13.7%), and Indonesia (12.4%) The vibrant economies of Southeast Asia have enormous development potential as well as significant and interconnected economic, social, and environmental issues These difficulties are made worse by the fact that the area's existing growth strategy is mostly focused on the exploitation of natural resources Twenty percent of the total wealth of these seven nations comes from natural capital The sustainability of the existing development paradigm is questioned by the rate of natural capital depletion Over the past ten years, natural capital has been declining at an increasing pace across the majority of ASEAN nations, particularly in Cambodia, Lao PDR, and the Philippines It is concerning that the pace of depletion in the area is increasing and might eventually become unsustainable The decision that the region's leaders must make is whether to stick with the catastrophic grow-now-clean-up-later strategy or adopt a far-sighted green growth strategy that can sustain long-term growth without tampering with the well-being of future generations The COVID-19 pandemic is primarily a catastrophe for people Worldwide, there had been reported 3.5 million illnesses and 250,000 fatalities by early May 2020 In ASEAN, there had been recorded 35,000 infections and 1,600 deaths The pandemic response measures that were put in place might save lives, but they are also having a wide range of economic effects and spreading economic contagion According to the IMF, global production would decline by 3% in 2020, with growth in the majority of ASEAN nations being either flat or negative However, there is a significant difference in the predicted growth across ASEAN during this year, ranging from -2.7% in Vietnam to 6.7% in Thailand The effects of COVID-19 are hitting ASEAN economies at a time when other risk factors, such as a global growth slowdown, were already taking place Tourism, travel, supply chains, and the labor market are all being affected by COVID-19 Uncertainty is driving negative sentiment All of this has an impact on trade, investment, and production, which has an impact on growth The domestic demand will drastically fall as a result of all these interruptions And their effect on economic expansion will spread these issues even more CHAPTER 2: THEORETICAL FRAMEWORK 2.1 Theories of sustainable economic growth The concept of "sustainable development" originally appeared in the World Conservation Union's World Conservation Strategy, published in 1980 (IUCN 1980) In 1987, the UN World Commission on Environment and Development published the so-called Brundtland report 'Our Common Future,' which elaborated on the concept (WCED 1987) Finally, during the United Nations World Conference on Environment and Development (UNCED 1992) in Rio de Janeiro, national governments agreed on and confirmed the global concept of sustainable development The concept of sustainable development has been studied over years based on the leveraging of fragmented multidisciplinary literature and multiple repositories of knowledge concentrating on sustainable development In the study on the concept of sustainable development, Yosef Jabareen (2006) pointed out that the conceptual analysis identifies seven concepts that together synthesize and assemble the theoretical framework of ‘sustainable development’ This paradigm is built around the concept of ethical paradox In other words, the unresolved and fluid paradox of sustainability serves as the epistemological underpinning for the theoretical framework of sustainable development The concept of natural capital shock represents the material side of the theoretical world of sustainability (David Pearce, Edward Bar bier, AnilMarkandya, 2000) The concept of equity represents the social dimensions of SD (JohnPezzey, 1989) The concept of eco-form refers to the desirable ecological form of urban places and communities The concept of integrative management refers to a holistic and integrative approach to social development, economic progress, and environmental protection The concept of political global agenda refers to a new global political and environmental discourse centered on the concepts of sustainability The concept of utopianism expresses visions for human habitation based on SD Achieving sustainable economic growth has always been the goal of developing economic theories and strategies A theoretical contribution to growth literature, Adam Smith, who wrote "An Inquiry into the Nature and Causes of the Wealth of Nations," primarily focuses on economic growth The "Neoclassical" growth model or "Solow-Swan" is the most widely used model to investigate sustainable economic growth It allows for perfect capital and labor substitution, which was not possible in previous models This means that the capital production ratio (k), which was previously regarded as exogenous in the Harrod-Domar model, is now an important adjustment component for achieving stable equilibrium This means that a change in k would equate to a change in the stable rate, causing the economy to return to its steady state Its conclusion differs significantly from previous models, claiming that countries will converge to the same level of income if they save, depreciate, grow their workforce, and increase productivity at the same rate After that, Endogenous Growth Theory was developed by Romer (1980s) However, these models have serious consequences for economic growth There is no force that leads to an equilibrium growth rate across closed economies that is based on national savings and technology Second, despite having similar populations and savings rates, there is no evidence of catch-up to rich economies On the contrary, developing economies may have a higher return on investment due to a lower capital-to-labor ratio, but this benefit is diluted by a lack of complementary investment in education and R&D Most recent model was the Schumpeterian theory of innovation Technological advancement, according to Schumpeter, is defined as innovation that leads to more