Correlation Between Independent Variables And Dependent Variable

Decent Essays
The results of the above table 4 indicate that all coefficients between independent variables and the dependent variable (the volume of bilateral trade) have significant and positive linear correlation with each other. Therefore, the results confirm the theoretical basis and the estimated coefficients are consistent with theoretical expectations.
 The coefficient of the product of country i (Iran) GDP multiply by country j (Iran 's trade partner) GDP, as the most appropriate economic variable that determines the economic size of countries, is in accordance with theoretical expectations which is positive and at statistical confidence level of 95 percent is significant and equal to 0.88 percent. This means that a one percent increase in GDP of Iran or country j, bilateral trade volume will increase by 0.88 percent. Since the GDP is known as economic capacity, economic size and economic strength of an economic system are, therefore, an increase in this variable will increase country 's ability to produce more. It will lead to an increase in supply and demand for trade between two countries. In other words, larger countries with higher production capacity will be more capable of boosting their production level, in order to have a comparative advantage in terms of economic scale and consequently increase their exports. They also will have stronger domestic, national markets which demand more imports and thus an increase in GDP of the two countries will increase their volume of

Related Documents

  • Improved Essays

    - Countries around the world have been buying and selling goods and services for centuries. This is also known as international trade. In fact, nations that trade make themselves better off economically, than the ones who don’t. In Canada, more than 30 percent of the total annual income is provided from imports and exports each. - The way that a country decides what to trade is by comparing the opportunity cost.…

    • 736 Words
    • 3 Pages
    Improved Essays
  • Improved Essays

    In her article “Yes, But won’t bill Gats Save Us?” by Naomi Klein takes a look at the way in which manufacturing jobs move from local factories to foreign countries and particularly to place known as export processing zone, such zones often gave no labor laws, leading to terrible working conditions. The example that he gave was a about North America, where the lack of manufacturing jobs has led to an increase of work in the services sector, where most of the jobs are minimum wage and offer no benefits. In addition to that, she also introduces the term “McJob” which is defined as a job with poor compensation and that doesn’t give an inflexible or undesirable hours. These jobs are being present by corporation as temporary employment for the students and recent graduates so they do offer living wages or any benefits.…

    • 523 Words
    • 3 Pages
    Improved Essays
  • Improved Essays

    Third, growing economically is significant since increasing the good production and available services would increase GDP and consequently lead to the establishment of more jobs which is especially important…

    • 1086 Words
    • 5 Pages
    Improved Essays
  • Improved Essays

    Free Ranger #2: The Dawn of a Better Day “Your Honor, I have stated in this court that I am opposed to the social system in which we live, that I believe in a fundamental change-but if possible by peaceable and orderly means. Standing here this morning, I recall my boyhood. At fourteen I went to work in a railroad; at sixteen I was firing a freight engine on a railroad. I remember all the hardships and privations of that earlier day, and from that time until now my heart has been with working class. I could have been in congress long ago.…

    • 918 Words
    • 4 Pages
    Improved Essays
  • Improved Essays

    70s To 95 Case Study

    • 426 Words
    • 2 Pages

    The trade figures are also not very impressive. It is indeed very impressive to see countries like China, India and Soviet Union have changed their economic policies to become more International. Years in 70s to 95 saw a huge wave of economic integration among nations. Integration level has increased exponentially post the communism collapse.…

    • 426 Words
    • 2 Pages
    Improved Essays
  • Improved Essays

    So far in this course we have examined the previous years from 1980’s to 2012. The trade deficit has steadily increased over the elongated period. We have also inquired information of the countries that we are actively trading through. While the United States of America account for 10.2% of the world’s merchandise trade, China is closely behind accounting for 9.9% of the world’s merchandise trade. China, our number one leading import is at 18.51% alone, while we only export 7.07% export.…

    • 667 Words
    • 3 Pages
    Improved Essays
  • Improved Essays

    GDP In The United States

    • 452 Words
    • 2 Pages

    GDP is a measure of economic activity. GDP gives us a better idea of what is produced within the United States rather than what is produced by Americans-whether in the U.S or elsewhere. GDP is designed better to give information on the state of the business cycle of the United States because it only focuses on the activity within the United States. Switching to GDP makes it easier to compare with other countries because most countries were already using GDP.…

    • 452 Words
    • 2 Pages
    Improved Essays
  • Decent Essays

    M Alaysia Case Study

    • 809 Words
    • 4 Pages

    Howcanyouhelp? W e greatly appreciate all the help we can get from the public,to help M alaysia,to help the children,you can donate at: - www.hungertamersaus.com.au/donate You can donate (one tim e or m onthly): - $5 - $10 - $50 - $100 1234 5t h Ave NewYork, NY00000 www.website.com Thank you for Donating Australia'srelationshipwithMalaysia Australiahasastrong and extremely reliable relationship with M alaysia, being Australia's 9th biggest tradingpartner. Other connectionsinclude: - The total value of trade between Australia and M a l a y s i a i s 17 , 4 5 6 m i l l i o n A u s t r a l i a n D o l l a r s - Thevalueof exportsis6,137million Australian Dollars - Thevalueofimportsis11,319millionAustralian Dollars -…

    • 809 Words
    • 4 Pages
    Decent Essays
  • Improved Essays

    Canada Exchange Rates

    • 829 Words
    • 4 Pages

    When there is positive trade balance where exports are more than a country’s imports, this increases demand for the…

    • 829 Words
    • 4 Pages
    Improved Essays
  • Improved Essays

    International trade is essential for the growth of the economy. Trillions of dollars worth of goods and services are exported and imported between the U.S and the rest of the world. The U.S is the world's second largest exporter behind only China. Exporting goods is extremely important to the growth of the United States economy. The U.S is also the world leader in importing goods and services.…

    • 1538 Words
    • 7 Pages
    Improved Essays
  • Improved Essays

    Answer the following questions to the best of your ability. Submit all the questions in one document. They should appear in the document in the order that they appear below. 1. Give three examples of opportunity cost from your day-to-day life, and how you made your decision based on opportunity cost.…

    • 873 Words
    • 4 Pages
    Improved Essays
  • Improved Essays

    Primitive accumulation is the development of capitalist products by a means of precapitalist modes of production. Primitive accumulation of capital was the driving force behind European wealth and power. These precapitalist modes of production, consisted of stealing and slavery, which allowed countries to develop a large quantity of capital production. This accumulation of wealth, allowed some countries to flourish and develop relations between capital and labour. Uruguayan journalist, Eduardo Galeano, wrote a book called Open Veins of Latin America, describing his views on primitive accumulation and the countries affected by it.…

    • 976 Words
    • 4 Pages
    Improved Essays
  • Improved Essays

    Pearson's Correlation

    • 827 Words
    • 4 Pages

    After data collection, the study utilized Pearson’s Correlation Coefficients to measure the collected data and determine the following correlation in support of the hypothesis: there is a positive correlation between poor bison management practices in the Greater Yellowstone Ecosystem, poor elk management practices in the Greater Yellowstone Ecosystem of Montana, and the spread of brucellosis in both wildlife and livestock during the past two decades; preventing bison from full population recovery. This theory is proven through the evaluation of the following data: the correlation between bison captured that tested positive for brucellosis and brucellosis transmission to livestock, the correlation between bison abundance and the number of bison captured, and the correlation between bison abundance and the amount of bison harvested each year. Utilizing the following correlation…

    • 827 Words
    • 4 Pages
    Improved Essays
  • Great Essays

    The Allied nations from the conference proposed the creation of a regulating body to oversee trade as well as money exchange. The ITO was that body. Some of the countries looking at ITO formation were also starting to negotiate rules to govern the trade that would be overseen by the ITO once formed and agreed upon. These rules were called The General Agreement on Tariffs and Trade. The ITO was never formed, primarily due to the United States’ refusal to sign.…

    • 2080 Words
    • 9 Pages
    Great Essays
  • Improved Essays

    In Ricardo Hausmann’s article, “Prisoners of Geography,” he discusses the effects of geography on the economic stability of a certain area. After several detailed explanations, Hausmann comes to the conclusion that geography is the deciding factor in the development of a region’s economy with no regards to the people’s desires. The author’s belief that citizens are bound and chained to their geography and the effects the environment has on their economy despite their efforts is an accurate description of the correlation between location and economy. At the beginning of the article, Hausmann introduces the main two factors of economic growth according to Adam Smith and Joseph Schumpeter, which are the country’s accessibility to markets and its technological progress.…

    • 440 Words
    • 2 Pages
    Improved Essays