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Factors affecting GDP growth GROUP Trần Lê Đức An Bảo Nhi Nguyễn Thế Đạt Nguyễn Thu Hương Nguyễn Thị Khánh Linh Lê A THEORETICAL ASPECTS MODEL: GDP = FER + FD + IP + EP + STATUS 01 Basic theories 02 The research gap B MODEL TESTING 01 Linear function 02 Quadratic function 03 Semi logarithm function 03 Review of Literature (log-level) 04 Data and Objectives 04 Testing for the most 05 The selected variables efficient model A THEORETICAL ASPECTS 01 Basic theories - GDP is an indicator of the growth of an economy - There are certain macro factors operating in the economic environment that will influence the GDP growth rate namely Total exchange reserves, Current Fiscal Deficit, import goods, export goods - The study revealed that Total exchange reserves, Current Fiscal Deficit, import goods, export goods are the factors that significantly predict GDP of the economy   A THEORETICAL ASPECTS 02 The research gap The research in the liturature review and basic theories only collect data in or countries Our research collect data from 36 countries in continents of the world 03 Review of Literature • Ramos (2001) investigated the Granger-causality between exports, imports and economic growth in Portugal over the period 1865-1998 • MOHAMMAD KASHIF, P. SRIDHARAN, S. THIYAGARAJAN (Sept 2017): Impact of economic growth on international reserve holdings in Brazil • Mohammad Rafiqul Islam, Mohaiminul Haque (2018) The Success of Export and Its Impact on GDP of Bangladesh • Amritkant Mishra (Oct 2019): How Does Economic Growth React to Fiscal Deficit and Inflation? Analysis of China and India A THEORETICAL ASPECTS 04 Data and Objectives The data be collected on the website databank.worldbank.org The main objectives of the study are: ==> To identify the relationship between selected economic variables and GDP of Economies ==> To analyze the impact of selected economic variables on GDP of Economies A THEORETICAL ASPECTS 05 The selected variables A) Dependent Variable: Y :GDP B) Independent Variable: X1:Foreign exchange reserves (FER) X2: Fiscal deficit (FD) X3: Imports of goods and services (IP) X4: Exports of goods and services (EP) C) Dummies Variables: -X5: Status: 1: Developed countries 0: Developing countries B MODEL TESTING 01 Linear function (Table 1) ● GDP = β0 + β1FER + β2FD + β3IP + β4EP + β5STATUS + β6WTO + β7 APEC 02 Quadratic function (Table 2) ● GDP = β0 + β1FER + β2FD + β3FD^2 + β4IP + β5EP+ β6STATUS + β7WTO + β8APEC 03 Semi logarithm function (log-level) (Table ● Ln 3) (GDP) = β0 + β1FER + β2FD + β3IP + β4EP + β5STATUS 04 Testing for the most efficient • RAMSEY reset: model a Linear function: GDP = β0 + β1FER + β2FD + β3IP + β4EP + β5STATUS Hypothesis pair:  H0: β6= β7=0 H1: β62+ β72 ≠0 Hypothesis pair:  H0: β6= β7=0 H1: β62+ β72 ≠0 P-value = 0.0000 α = 0.05 => P-value < α => We accept H1, that means this function is biased b Quadratic function: GDP = β0 + β1FER + β2FD + β3FD^2 + β4IP + β5EP+ β6STATUS Hypothesis pair:  H0: β7= β8=0 H1: β72+ β82 ≠0 P-value = 0.0125 α = 0.05 => P-value < α => We accept H1, that means it is biased c Semi Logarithm function: Ln (GDP)= β0 + β1FER + β2FD + β3IP + β4EP + β5STATUS Hypothesis pair:  H0: β6= β7=0 H1: β62+ β72 ≠0 P-value = 0.0002 α = 0.05 => P-value < α => We accept H0, that means this function is biased • WHITE test: E(u2) = a1 + a2X2 + a3X3 + a4X22+ a5X32 σ2=0 ⬄ a2=a3=a4=a5=0 Hypothesis pair:  H0: a1=a2=a3=a4=a5=0H1:aj≠0 a Linear function: P-value = α = 0.05 => P-value < α => We reject H0, that means it is heteroscedasticity b Quadratic function: P-value = 0.0001 α = 0.05 => P-value < α => We reject H0 that means it is heteroscedasticity c Semi Logarithm function: P-value = 0.3642 α = 0.05 => P-value > α => We accept H 0, that means (3) is homoscedasticity Model selection: Mode l I II III Adjusted R2 AIC HQ SC 0.98866 0.979371 0.6895 15.25 15.66 2.37 15.55 15.92 2.63 15.35 15.75 2.46 Semi logarithm function (log- level) ● Ln (GDP) = β0 + β1FER + β2FD + β3IP + β4EP + β5STATUS = 5.565491 + 0.000822FER + 0.004031FD + 0.003637IP + 0.001822EP + 0.327835STATUS   ● (019778) (0.000446) (0.002205 ) (0.001854) (0.001798) (0.2705)   ● R –squared = 0.732635 ; n = 37 SSR= 16.85131 Test economic assumption • Status can not affect GDP H0 : β5 = H1 : β5 ‡ p-value = 0.232 > 0.05 → Accept H0 : GDP is not influenced by status of country   C CONCLUSION: Our model accepts K Hema Divyaa, Dr V Rama Devib assumptions about GDP and influenced factors,correspondently Moreover, we have finally determined that imports, exports and the STATUS of a country in our model does not affect gdp So, our model is of a not satisfactory explanatory ability of crossaction data We found out that we cannot predict the future correctly That is why, from macroeconomic point of view, our model is incorrect REFERENCES K Hema Divyaa, Dr V Rama Devib - A STUDY ON PREDICTORS OF GDP: EARLY SIGNALS Ramos (2001) investigated the Granger-causality between exports, imports and economic growth in Portugal over the period 1865-1998 MOHAMMAD KASHIF, P. SRIDHARAN, S. THIYAGARAJAN (Sept 2017): Impact of economic growth on international reserve holdings in Brazil Mohammad Rafiqul Islam, Mohaiminul Haque (2018) The Success of Export and Its Impact on GDP of Bangladesh Amritkant Mishra (Oct 2019): How Does Economic Growth React to Fiscal Deficit and Inflation? Analysis of China and India THANKS FOR YOUR LISTENING