Jurnal Ekonomi & Studi Pembangunan
Vol 24, No 1: April 2023

Fix effect sur to analyze economic growth in developed and developing countries

Muhamad Liswansyah Pratama (Department of Statistics, Faculty of Mathematics and Science, Universitas Brawijaya, East Java)
Rahma Fitriani (Department of Statistics, Faculty of Mathematics and Science, Universitas Brawijaya, East Java)
Suci Astutik (Department of Statistics, Faculty of Mathematics and Science, Universitas Brawijaya, East Java)



Article Info

Publish Date
30 May 2023

Abstract

This study aims to identify the relationship between population density, inflation, and unemployment rates on the human development index, GNP, export-import, and urbanization in the developed and developing countries category using the Fix Effect Seemingly Unrelated Regression (FE SUR) with a dummy variable as the slope component. This research necessitates the development of the Seemingly Unrelated Regression model, specifically the Panel Seemingly Unrelated Regression (Panel SUR) model with a dummy variable as the slope component, due to the dynamic nature of the data and the fact that the same set of predictor variables explains the five response variables. The Panel, the Seemingly Unrelated Regression model with dummy variables, can accommodate research objectives where the SUR model can explain the influence between variables, differences in characteristics between countries can be explained by fixed effect models, and differences in the effect of population density, inflation, and unemployment rates on the human development index, GNP, exports imports and urbanization in the categories of developed and developing countries can be explained by slope dummy variables. The results showed that 98.46% of the diversity of response variables (human development index, GNP, exports, imports, and urbanization) could be explained by predictor variables (population density, inflation, and unemployment rate), while the other 1.54% was explained by other factors not included in the fixed effect SUR model. In addition, the results show that population density has a significant positive relationship with GNP, imports, and exports. However, there is a significant negative relationship between unemployment and GNP. There are large differences in the relationship between the unemployment rate and GNP in developed and developing countries, whereas in developed countries, there is a larger and negative relationship compared to developing countries.

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Journal Info

Abbrev

esp

Publisher

Subject

Economics, Econometrics & Finance

Description

Journal of Economic & Development Studies (JESP) aims to publicize the results of research concerning economics and development at local, national, and international ...