Using firm-level Indian manufacturing data, the following two alternative models of employment (EMP) are estimated: Model...

   

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Using firm-level Indian manufacturing data, the following two alternative models of employment (EMP) are estimated: Model 1: Model 2: 1) ii) log(EMP)= 0.42 +0.0165 EXPORTS n = 1200 R2 = 0.26 iii) log(EMP) 0.48 + 0.223 log (EXPORTS) n = 1200 R² = 0.28 where EMP is measured in thousands of persons and EXPORTS represents the firm's exports measured in millions of dollars. - Interpret the slope coefficient in each model. Based on Model 1 presented above, what is the predicted employment for a firm with an export of 4.82 million dollars? Which of the two model specifications do you think fit the data better and why? (4+3+2=9 marks) Using firm-level Indian manufacturing data, the following two alternative models of employment (EMP) are estimated: Model 1: Model 2: 1) ii) log(EMP)= 0.42 +0.0165 EXPORTS n = 1200 R2 = 0.26 iii) log(EMP) 0.48 + 0.223 log (EXPORTS) n = 1200 R² = 0.28 where EMP is measured in thousands of persons and EXPORTS represents the firm's exports measured in millions of dollars. - Interpret the slope coefficient in each model. Based on Model 1 presented above, what is the predicted employment for a firm with an export of 4.82 million dollars? Which of the two model specifications do you think fit the data better and why? (4+3+2=9 marks)

Answer rating: 100% (QA)

In Model 1 the slope coefficient of 00165 represents the change in the natural logarithm of employment logEMP for a oneunit increase in exports EXPORT... View the full answer