Question

A study was conducted to assess the influence of various factors on the start of new firms in the computer chip industry. For a sample of 70 countries the following model was estimated:
R2 = 0.766
where
y` = new business starts in the industry
x1 = population in millions
x2 = industry size
x3 = measure of economic quality of life
x4 = measure of political quality of life
x5 = measure of environmental quality of life
x6 = measure of health and educational quality of life
x7 = measure of social quality of life
The numbers in parentheses under the coefficients are the estimated coefficient standard errors.
a. Interpret the estimated regression coefficients.
b. Interpret the coefficient of determination.
c. Find a 90% confidence interval for the increase in new business starts resulting from a one-unit increase in the economic quality of life, with all other variables unchanged.
d. Test, against a two-sided alternative at the 5% level, the null hypothesis that, all else remaining equal, the environmental quality of life does not influence new business starts.
e. Test, against a two-sided alternative at the 5% level, the null hypothesis that, all else remaining equal, the health and educational quality of life does not influence new business starts.
f. Test the null hypothesis that, taken together, these seven independent variables do not influence new business starts.


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  • CreatedJuly 07, 2015
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