Trang 1 FOREIGN TRADE UNIVERSITY HO CHI MINH CAMPUS MIDTERM PROJECTECONOMETRICS THE RELATIONSHIP BETWEEN ELECTRICAL MACHINERY & EQUIPMENT EXPORTS HS CODE 85 AND ECONOMIC GROWTH IN VIETN
FOREIGN TRADE UNIVERSITY HO CHI MINH CAMPUS MIDTERM PROJECT ECONOMETRICS THE RELATIONSHIP BETWEEN ELECTRICAL MACHINERY & EQUIPMENT EXPORTS (HS CODE 85) AND ECONOMIC GROWTH IN VIETNAM FROM 2001 TO 2020 Team Class: K59CLC6 Class ID: 73 Supervisors: Mrs Le Hang My Hanh Ho Chi Minh City, April 2022 I GROUP OF AUTHORS Ninh Caly 2011116324 Hà Vũ Bảo Châu 2011116325 Lưu Hoàng Anh Dũng 2011116354 Hứa Quang Huy 2011116403 Lâm Tuyết Nhi 2011116504 Nguyễn Ngoc Thảo Vy 2011116630 Bùi Văn Duy 2013316675 I TABLE OF CONTENT TABLE OF CONTENT I TABLE OF TABLE III CHAPTER 1: INTRODUCTION 1.1 RATIONALE OF THE RESEARCH 1.2 AIMS AND OBJECTIVES 1.3 SCOPE OF THE RESEARCH 1.4 RESEARCH QUESTIONS 1.5 RESEARCH METHODS 1.6 METHOD OF DATA ANALYSIS CHAPTER 2: LITERATURE REVIEW 2.1 THEORATICAL BASIS 2.2 PREVIOUS RESEARCH MODELS 2.2.1 Domestic research 2.2.2 Foreign research 2.2.3 Research capacity CHAPTER 3: RESEARCH METHOD AND DATA 3.1 RESEARCH METHOD 3.1.1 Variable descriptions: 3.1.2 Brief justification of explanatory variables 10 3.1.2.1 Government spending (govt) of vietnam 10 3.1.2.2 Investment (FDIt): 11 3.1.2.3 Labor (LAB t): 12 3.1.2.4 Export (EX t): 14 3.1.2.5 Setting up a research model 15 3.2 DATA COLLECTION AND PROCESSING 3.2.1 Data collection methods 16 3.2.2 Data processing method 17 3.2.2.1 Data processing software – STATA 17 3.2.2.2 Data processing methods 17 3.2.3 Data CHAPTER 4: RUN STATA 19 4.1 MULTIPLE REGRESSION MODEL 4.1.1 Multiple regression model 19 4.1.2 Meaning of regression coefficients 19 4.1.3 Hypothesis testing of regression coefficients 20 4.1.3.1 Test β1 20 4.1.3.2 Test β2 20 4.1.3.3 Test β3 20 4.1.3.4 Test β4 21 II 4.1.4 Test of the overall significance of the regression 21 4.1.5 Measure of goodness of fit of the estimated regression 22 4.2 CHECK THE MODEL'S DEFECT 4.2.1 Multicollinearity 4.2.1.1 The detection of Multicollinearity 22 4.2.1.2 Remedies for Multicollinearity 25 b Drop LFDI (2) 27 c Drop LEX (3) 28 d Drop LGOV (4) 29 e 4.2.1.3 4.2.2 4.2.2.1 4.2.2.2 4.2.2.3 4.2.3 Drop LLAB, LGOV (5) 30 Building and testing new model 31 Detecting heteroscedasticity 33 Park Test 33 Breusch-Pagan-Godfrey Test 34 White’s General Heteroscedasticity Test 34 General analysis CHAPTER 5: CONCLUSION, LIMITATIONS AND POLICY PROPOSED 37 5.1 CONCLUSION 5.2 LIMITATIONS: 5.3 PROPOSING SOME SOLUTIONS TO INCREASE VIETNAM’S GDP 39 5.3.1 Export 5.3.2 FDI REFERENCES III APPENDIX VI III TABLE OF TABLE Table 1: Variables’s description 10 Table 2: Auxiliary regression for each explanatory variable 24 CHAPTER 1: INTRODUCTION 1.1 RATIONALE OF THE RESEARCH In the context of international economic integration, the relationship between exports and economic growth is a frequently discussed topic According to figures and events reviewed by GSO, economic growth is the increase in the amount of production an economy produces over time On that basis, researchers can provide orientations and policies for development in the next period Specifically, GDP is an aggregate economic indicator, used as an indicator of economic development That is why GDP is used by most countries in the world to evaluate economic growth In macroeconomics, export is an element in GDP, so the development of exports can play an important role in the economic growth of a country This has been proven by many ancient economists such as Adam Smith David Ricardo Based on these theoretical works, a series of empirical studies have been conducted, using national, regional, and international data samples to elucidate the relationship between exports and economic growth Nevertheless, there are still few research papers that study the relationship of a specific export commodity to the economy Specifically, the electronics industry is a manufacturing industry with an important strategic position in the economy and has a strong impact on other industries Especially, the export of electrical machinery and equipment (HS code 85) accounts for nearly 40% of the total export turnover According to the report of the Ministry of Industry and Trade, Vietnam has risen to the group of key exporters of electronic goods, from 47th place in 2001 to 11th place in 2020 According to Vietnam's electronic industry master plan in the 2016 - 2020 period, the growth of the electronics industry in the 2016 - 2020 period will reach 23.8%/year; the vision by 2030 to reach 19-21%/year With that strong development, the government wishes to set the goal of building the electronics industry to become a key industry and create a support base for other Document continues below Discover more from:tế lượng kinh kte309 Trường Đại học… 816 documents Go to course Tổng hợp đề CK KTL 17 đáp án - đề thi tổng… kinh tế lượng 100% (8) ĐỀ Kinh Te Luong TEST1 kinh tế lượng 100% (6) Ý NGHĨA BẢNG HỒI 18 QUY MƠ HÌNH BẰN… kinh tế lượng 100% (5) Tiểu luận Kinh tế 30 25 lượng - nhóm 11-đã… kinh tế lượng 100% (5) Tiểu-luận -Đạođức-kinh-doanh-… kinh tế lượng 100% (4) ĐỀ ÔN THI KINH TẾ LƯỢNG industries to develop This also helps contribute to Vietnam's economicCUỐI growth KÌ in the 42 future kinh tế lượng 100% (4) Because of this reason, we conduct this research with a desire to test the relationship between Electrical machinery and equipment exportation and economic growth in Vietnam from 2001 to 2020 to clarify whether this commodity really has a large impact on the economic growth of Vietnam or not 1.2 AIMS AND OBJECTIVES The research is conducted with an aim to clarify the importance of a highly exported commodity on the economic development of Vietnam The result can help Vietnam’s government pay more attention to developing strong industries, from that can have more basis for issuing policies and strategies for economic development as a whole, as well as opening up further research directions for following research papers 1.3 SCOPE OF THE RESEARCH This research used time-series data for a period of 20 years from 2001 to 2020 in Vietnam Independent variables that are put in the model have contributions to the GDP of the country and relate to the problem that this report is focused on analyzing, including foreign direct investment (FDI), government spending (GOV), labor (LAB), and Electrical machinery and equipment export (hs code 85) With the scope is that: FDI is invested into Vietnam; total government spending by the Vietnamese government; labor working within Vietnam; and the commodity exports from Vietnam to the world 1.4 RESEARCH QUESTIONS What is the relationship between the exportation of Electrical machinery and equipment export (hs code 85) and economic growth? How is the development of electrical machinery and equipment export (hs code 85) in Viet Nam over the past twenty years? Besides exportation, how have other factors affected economic growth in Vietnam in the past 20 years? What policies can the government introduce to increase the export of Electrical machinery and equipment export (hs code 85) to promote economic growth? 1.5 RESEARCH METHODS The figures in this study are quantitative data, all data analyzed are quantitative figures The data source used for the study is the secondary data source, which has been compiled in advance and collected for processing These numbers are taken from Trademap, General Statistics Office and other official statistics channels of Vietnam and the world 1.6 METHOD OF DATA ANALYSIS The method that we use to analyse the data in this study is the quantitative analysis method Data will be synthesized and analyzed through the variable description and regression model building The variables will be observed through a multiple regression model expressed in natural logarithms Multiple regression model: LGDPt = β0 + β1LLABt + β2LGOVt+ β3LFDIt + β4LEXt + ei where LGDP is a dependent variable and LFDI, LLAB, LGOV, LEX are independent variables.F CHAPTER 2: LITERATURE REVIEW 2.1 THEORATICAL BASIS The relationship between exports and economic growth has been analyzed in many recent empirical studies However, the evidence for this relationship is quite varied While some studies show the existence of a causal relationship between exports and economic growth, others suggest that there is no positive relationship between these two factors There are two views on the issue of export-led economic growth Some dissenters argue that boosting export growth will not lead to a higher GDP growth rate, if other conditions remain unchanged, and/or some other preconditions not is satisfied There have been many studies showing a lackluster role of exports in GDP growth in a number of countries and groups of countries Others are in favor of export-led economic growth, and they argue that there is a vast body of scholarly research on the role of (exports) trade in economic growth, at least starting with It begins with the arguments of hundreds of years ago by economists such as Adam Smith and David Ricardo, and is most recently followed by a series of theoretical works by other prominent economists such as Romer, Grossman, Helpman, Baldwin, Feder and Forslid, etc - theoretical works that paved the way for the systematic and scientifically sound understanding and analysis of the relationship between exports and growth Based on these theoretical works, a series of empirical studies have been conducted, using national, regional and international data samples to elucidate this relationship These empirical studies tend to confirm that exports are positively associated with economic growth The successful outward development model of East Asian countries over the past decades is a strong testament to the role of exports as an engine of economic growth in this region However, it can be asserted that most researchers agree that export growth is one of the main factors leading to economic growth (ie, assuming export-led growth) This