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Factors that Affect GDPPC Growth

Factors that Affect GDPPC Growth. Bahgi B.Gilamichael bg1961a@american.edu American University School of International Service. Research Question & Research hypothesis. Research Question/s: Does foreign direct investment increase GDPPC? Does increased trade increase GDPPC?

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Factors that Affect GDPPC Growth

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  1. Factors that Affect GDPPC Growth Bahgi B.Gilamichael bg1961a@american.edu American University School of International Service

  2. Research Question & Research hypothesis Research Question/s: • Does foreign direct investment increase GDPPC? • Does increased trade increase GDPPC? • Does better governance increase GDPPC? • Does development aid increase GDPPC? Research hypothesis • Investment, international trade, better governance and aid increase the GDPPC of a country.

  3. Background Info or Lit. Review • Dambisa Moyo • advocates for increased FDI and trade • Robert Baldwin • outward oriented grow faster than in-ward oriented economies • Jeffrey Sachs • advocates for increased development aid • John Shuhe Li • analyses advantages of rule-based governance instead of relation-based

  4. Data • Unit of analysis : country, data from World Bank • Dependent variable (Interval-ratio LOM) • Gross Domestic Product Per Capita Purchasing Power (GDPPC) • In current US dollars • Independent variables (Interval-ratio LOM) • Net Foreign Direct Investment in current US dollars % GDP (FDI) • Trade % of GDP (Trade) • Governance- rule-based structure (Governance) • Foreign Aid Per Capita (Aid) • Reliability of data • a few missing data • GDPPC=domestic work and degradation not account for • Aid= most of the money comes back to its origin, corruption

  5. Descriptive Statistics • GDPPC (Interval ratio) • Mean: 11,493.5 • Median:6,216.268 • Range: 6,8319 • Mode: none • FDI/GDP as %GDP (Interval ratio) • Mean: 6,33% • Median: 2,99% • Trade as %GDP(Interval ratio) • Mean: 94,74396 • Median: 86,49689 • Governance (Interval ratio) • Mean: 2.888158 • Median: 3 • Aid per capita (Interval ratio) • Mean: 89,48069 • Median: 46,2109

  6. Bivariate analysis - IR dependent variable

  7. Regression Analysis, Dependant Variable- log of GDPPC Model 1 Model 2 Model 3 Model 4 lFDI0.256** 0.145 0.143* 0.252** (3.19) (1.53) (2.04) (3.11) lTrade%GDP 0.542* 0.438* 0.645** (2.26) (2.08) (2.98) lAid 0.107 -0.279*** (1.26) (-4.48) lGovernance 0.634 (1.67) lConstant 8.340*** 6.094*** 4.381*** 6.003*** (62.76) (6.02) (4.82) (6.70) -------------------------------------------------------------------------- r2_a0.053 0.078 0.306 0.239 chi2 N163 158 65 114 -------------------------------------------------------------------------- * p<0.05, ** p<0.01, *** p<0.001

  8. Findings & Policy Implications of the research • Findings: Did you accept your research hypothesis? • Yes, FDI, Trade, better governance and aid increase the GDPPC • What are the policy implications of your findings? • More variables explains increase in GDPPC • Other variables including, education rate and level of freedom increase prediction

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