Economic Growth in ASEAN-4 Countries: A Panel Data Analysis

This research studies the impact of economic variables which are foreign direct investment (FDI), openness and gross fixed capital formation to economic growth which indicates using gross domestic product (GDP). Data is collected from 1981 until 2008 using World Development Indicator CD-ROM. This re...

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Main Author:	Nooraini, Saidin
Format:	Thesis
Language:	eng
Published:	2012
Subjects:	HB Economic Theory
Online Access:	https://etd.uum.edu.my/3038/1/Nooraini_Saidin.pdf
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id	my-uum-etd.3038
record_format	uketd_dc
institution	Universiti Utara Malaysia
collection	UUM ETD
language	eng
advisor	Hussin, Fauzi
topic	HB Economic Theory
spellingShingle	HB Economic Theory Nooraini, Saidin Economic Growth in ASEAN-4 Countries: A Panel Data Analysis
description	This research studies the impact of economic variables which are foreign direct investment (FDI), openness and gross fixed capital formation to economic growth which indicates using gross domestic product (GDP). Data is collected from 1981 until 2008 using World Development Indicator CD-ROM. This research estimates using panel data estimation. In order to test the significance of the variable, this research uses panel unit root test. Result of panel data unit root test shows that all variables in panel unit root test are significant and stationary at first difference 5 percent level of significant. In addition, the impact of variables to GDP is estimated using three panel estimation models which are called pooled model (pooled), fixed effects model (FEM) and random effects model (REM). Result of three particular models in panel estimation give the stationary at 5 percent level of significant for all variables involved. Variable of openness for pooled and random effects model indicate negative relation with GDP. Meanwhile, other variables in all models show positive relation with GDP. Goodness to fit in this research for all models demonstrate high value which 0.74 (pooled), 0.87 (FEM) and 0.73 (REM). Furthermore, Hausman test is employed to this research in order to choose the best model. Result for this test suggests rejecting null hypothesis because of the value of p is 0.00 (p<.05). On other words, rejecting of null hypothesis may conclude that the FEM will apply. Thus, this research describes that all variables are correlated with each other and also have the positive relationship to GDP. Hence, all variables may lead economic growth boost when they are increase whereas FDI becomes the most efficient variable in order to assist economic growth and followed by openness and gross fixed capital formation. Otherwise, the result in Ordinary Least Squares (OLS) which implies in this study as well test all variables stationary at 5 percent level of significant. These shows only gross fixed capital formation is significant to growth and contributes the positive effect to GDP in each ASEAN-4 countries. However, OLS estimation result for Indonesia shows the other variable has significant to growth which is openness; while it gives the negative affect the GDP. Instead of Indonesia, openness is not significant at other ASEAN-4 countries such as Malaysia, Thailand and Philippines. Besides, other variable is FDI also not significant in the case of all ASEAN-4 countries. It means that, openness does not correlated to growth for Malaysia, Thailand and Philippines countries; while FDI is not correlated to growth for all ASEAN-4 countries in this study.
format	Thesis
qualification_name	masters
qualification_level	Master's degree
author	Nooraini, Saidin
author_facet	Nooraini, Saidin
author_sort	Nooraini, Saidin
title	Economic Growth in ASEAN-4 Countries: A Panel Data Analysis
title_short	Economic Growth in ASEAN-4 Countries: A Panel Data Analysis
title_full	Economic Growth in ASEAN-4 Countries: A Panel Data Analysis
title_fullStr	Economic Growth in ASEAN-4 Countries: A Panel Data Analysis
title_full_unstemmed	Economic Growth in ASEAN-4 Countries: A Panel Data Analysis
title_sort	economic growth in asean-4 countries: a panel data analysis
granting_institution	Universiti Utara Malaysia
granting_department	Othman Yeop Abdullah Graduate School of Business
publishDate	2012
url	https://etd.uum.edu.my/3038/1/Nooraini_Saidin.pdf
_version_	1747827485884547072
spelling	my-uum-etd.30382022-10-17T04:15:05Z Economic Growth in ASEAN-4 Countries: A Panel Data Analysis 2012-02 Nooraini, Saidin Hussin, Fauzi Othman Yeop Abdullah Graduate School of Business Othman Yeop Abdullah Graduate School of Business HB Economic Theory This research studies the impact of economic variables which are foreign direct investment (FDI), openness and gross fixed capital formation to economic growth which indicates using gross domestic product (GDP). Data is collected from 1981 until 2008 using World Development Indicator CD-ROM. This research estimates using panel data estimation. In order to test the significance of the variable, this research uses panel unit root test. Result of panel data unit root test shows that all variables in panel unit root test are significant and stationary at first difference 5 percent level of significant. In addition, the impact of variables to GDP is estimated using three panel estimation models which are called pooled model (pooled), fixed effects model (FEM) and random effects model (REM). Result of three particular models in panel estimation give the stationary at 5 percent level of significant for all variables involved. Variable of openness for pooled and random effects model indicate negative relation with GDP. Meanwhile, other variables in all models show positive relation with GDP. Goodness to fit in this research for all models demonstrate high value which 0.74 (pooled), 0.87 (FEM) and 0.73 (REM). Furthermore, Hausman test is employed to this research in order to choose the best model. Result for this test suggests rejecting null hypothesis because of the value of p is 0.00 (p<.05). On other words, rejecting of null hypothesis may conclude that the FEM will apply. Thus, this research describes that all variables are correlated with each other and also have the positive relationship to GDP. Hence, all variables may lead economic growth boost when they are increase whereas FDI becomes the most efficient variable in order to assist economic growth and followed by openness and gross fixed capital formation. Otherwise, the result in Ordinary Least Squares (OLS) which implies in this study as well test all variables stationary at 5 percent level of significant. These shows only gross fixed capital formation is significant to growth and contributes the positive effect to GDP in each ASEAN-4 countries. However, OLS estimation result for Indonesia shows the other variable has significant to growth which is openness; while it gives the negative affect the GDP. Instead of Indonesia, openness is not significant at other ASEAN-4 countries such as Malaysia, Thailand and Philippines. Besides, other variable is FDI also not significant in the case of all ASEAN-4 countries. It means that, openness does not correlated to growth for Malaysia, Thailand and Philippines countries; while FDI is not correlated to growth for all ASEAN-4 countries in this study. 2012-02 Thesis https://etd.uum.edu.my/3038/ https://etd.uum.edu.my/3038/1/Nooraini_Saidin.pdf text eng public masters masters Universiti Utara Malaysia Adhikary, B. K. (2011). FDI, trade openness, capital formation, and economic growth in Bangladesh: A lingkage analysis. International Journal of Economics And Finance, 6(1). Retrieved from www.ccsenet.org/ijbm Agbetsiafa, D. K. (2010). Regional integration, trade openness, and economic growth: Causality evidence from UEMOA countries. International Business and Economics Research Journal, 9(10). Aizenman, J. & Noy, I. (2009). Endogenous financial and trade openness. Review of Development Economics, 13(2), 175-189. doi: 10.1111/j.1467-9361.2008.00488.x Akbar, A. 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Economic Growth in ASEAN-4 Countries: A Panel Data Analysis

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