Determinants of Economic Growth

[Emporio John]

i have panel data spanning 1990-2020, i want to find the determinants of economic growth and i have the following variables, gdp cpi fertilityrate fdi generalgov grossfixedcapital lifeexpectancy unemployment trade voiceandaccountability ruleoflaw. I understand that some of these variables will suffer from multicollinearity and hence ill have to remove some. Any help as to how i could approach this would be appreciated, any questions please ask. Thank You

[Nick Cox]

This is a rehash of your previous post at https://www.statalist.org/forums/for...conomic-growth

Daniel Schaefer made some good suggestions there and you've ignored most of them.

I could be wrong but I have two guesses here. One that this is an assignment; the other is that it's not so much an assignment as a Master's level project. If the first, then please read the FAQ Advice on homework-based questions. If the second, I still think this isn't a good question for Statalist. It's too broad to allow a specific answer.

[Emporio John]

sorry Nick Cox i didnt see his response. . xtreg gdp fdi1 fertilityrate1 cpi1 generalgov1 unem
> ployment1 trade1, fe

Fixed-effects (within) regression Numbe
> r of obs
> =
> 116
Group variable: country Numbe
> r of groups
> =
> 4

R-squared: Obs p
> er group:
Within = 0.8237
> min
> =
> 29
Between = 0.0665
> avg
> =
> 29.0
Overall = 0.2271
> max
> =
> 29

F(6,
> 106)
> =
> 82.52
corr(u_i, Xb) = -0.2666 Prob
> > F
> =
> 0.0000

-----------------------------------------------------
> -------------------------
gdp | Coefficient Std. err. t P>|t|
> [95% con
> f. interval]
-------------+---------------------------------------
> -------------------------
fdi1 | -.1603599 .0499163 -3.21 0.002
> -.2593238
> -.0613959
fertilityr~1 | 1.872534 .4413732 4.24 0.000
> .9974686
> 2.747599
cpi1 | 8.472579 .6539803 12.96 0.000
> 7.175999
> 9.769158
generalgov1 | 2.460018 .4547539 5.41 0.000
> 1.558424
> 3.361612
unemployme~1 | -.2805091 .115235 -2.43 0.017
> -.5089737
> -.0520445
trade1 | .6112999 .1732121 3.53 0.001
> .26789
> .9547098
_cons | 7.04335 1.509594 4.67 0.000
> 4.050433
> 10.03627
-------------+---------------------------------------
> -------------------------
sigma_u | 1.6742848
sigma_e | .37376249
rho | .95253082 (fraction of variance due
> to u_i)
-----------------------------------------------------
> -------------------------
F test that all u_i=0: F(3, 106) = 32.47
> Prob > F = 0.0000



Thats my results from xtreg, (Hausman said to use fe)


. regress gdp fdi1 fertilityrate1 cpi1 generalgov1 un
> employment1 trade1

Source | SS df MS Nu
> mber of obs = 116
-------------+---------------------------------- F(
> 6, 109) = 181.46
Model | 283.84106 6 47.3068434 Pr
> ob > F = 0.0000
Residual | 28.4161374 109 .260698508 R-
> squared = 0.9090
-------------+---------------------------------- Ad
> j R-squared = 0.9040
Total | 312.257198 115 2.71527998 Ro
> ot MSE = .51059

-----------------------------------------------------
> -------------------------
gdp | Coefficient Std. err. t P>|t|
> [95% con
> f. interval]
-------------+---------------------------------------
> -------------------------
fdi1 | -.2202924 .0640142 -3.44 0.001
> -.3471666
> -.0934183
fertilityr~1 | -.6781165 .1686861 -4.02 0.000
> -1.012447
> -.3437862
cpi1 | 3.938068 .5005998 7.87 0.000
> 2.945895
> 4.93024
generalgov1 | 2.808051 .1598705 17.56 0.000
> 2.491193
> 3.124909
unemployme~1 | .5844288 .0797506 7.33 0.000
> .4263658
> .7424918
trade1 | .8426354 .2304069 3.66 0.000
> .3859765
> 1.299294
_cons | 10.95077 1.162007 9.42 0.000
> 8.647706
> 13.25383
-----------------------------------------------------
> -------------------------



Thats the results from reg.


My question is as to whether these results hold merit, are there any diagnostic tests i should be undertaking, If you have any questions please let me know

[Nick Cox]

I suggest you re-size your Results window and then re-post results using CODE delimiters.

Please read through the entire FAQ Advice

https://www.statalist.org/forums/help

https://www.statalist.org/forums/help#adviceextras

to get a better understanding of how Statalist works best.

(I am not an economist and do not work with your kind of data, but if you seek advice from economists, as you do, very specific questions are best.)