Factors That Determine Exports Per Capita

Factors That Determine Exports Per Capita
A statistical test was carried out to determine whether average FDI stocks per capita differed
between countries in group H and group L based on the following hypothesis.
H0: the average FDI stocks per capita is the same for countries in group H and group L
Versus
H1: the mean of FDI stocks per capita differs between countries in group H and group L
The test was carried out at 5% level of significance. The test was performed separately for the
different years and the table below represents the output. From the table the p-values for the FDI
stock for the years 1995, 2007, and 2016 were less than 5% level of significance, thus, the null
hypothesis (H0) was rejected (Buckley et al, 2014). The conclusion of the test was that the
average FDI stock per capita differed between the countries in group H and group L.
To determine whether the average export per capita differed between countries in group H and
group L, the following hypothesis
H0: the average export per capita is the same for countries in group H and group L
Versus
H1: the average export per capita differs between countries in group H and group L
An independent t-test was carried out at 5% level of significance to test the above hypothesis.
The output of the test is in table A below. From the table, the mean exports for the year 1995 and
2007 had p-values which were less than 0.05 level of significance thus the null hypothesis was
rejected. Therefore, the mean export per capita was different in the countries of group h and
countries in group l for the year 1995 and the year 2007. However, from the table below the test

for the year 2016 had a p-value of 0.06 which is greater than 0.05 level of significance thus, the
null hypothesis was accepted (Gassebner et al, 2013). The conclusion of the test was that the
average exports for countries in group h and group l were different in 1995 and 2007 while in
2016 exports per capita was the same.
Table A: Hypothesis testing results
Year Mean H Mean L Mean
Difference
T-ratio Sig.
1995
FDI per capita 63150.83 6827.65 56323.183 1.928 0.058
Exports per
capita
80375.27 11667.3 68707.942 3.168 0.02
2007
FDI per capita 330744.43 38842.63 291901.903 2.705 0.09
Exports per
capita
190708.43 59961.33 130747.108 2.464 0.016
2016
FDI per capita 455966.33 92498.98 361467.358 2.705 0.06
Exports per
capita
198703.37 86208.23 112495.142 1.482 0.143

A test for correlation was carried out to determine what kind of relationship existed between the
FDI stocks per capita and the exports per capita. The test involved FDI stocks and export per
capita for the period of 3 years. The results for the correlation are in table b below. From the
table, the correlation between FDI stocks per capita and exports per capita in 1995, 2007, and
2016 was 0.804, 0.724, and 0.704 respectively. All the correlation coefficients were close to one
and this indicated evidence of a strong positive linear relationship (Morelli et al, 2015). The
correlation coefficient for the two variable in 1995 was the highest. From the table, it's also clear
that the value of the correlation coefficient decreased as the years progressed. As a result, the
correlation coefficient between the two variables was highest in 1995 and was lowest in 2016.
From the table, the correlation between FDI stock per capita and exports per capita was
statistically significant in all the three years 99% level of significance.
Table B: Correlation table (whole sample)
Year FDI per
capita
Exports per
capita
1995
FDI per capita 1
Exports per capita 0.804** 1
2007
FDI per capita 1
Exports per capita 0.724** 1

2016
FDI per capita 1
Exports per capita 0.704** 1
* Significant at 95%; ** significant at 99%
To investigate further the correlation between the FDI per capita and exports per capita, the test
for correlation was divided into the countries group. The output for the test is in the table below.
From the table, the correlation for both group h and group l was close to one which indicated
evidence of strong positive correlation. All the correlation were also statistically significant at a
99% confidence level (Yilmaz and Kaynar, 2011). Additionally, the results in the table below
indicated that the correlation between FDI stocks per capita and exports per capita was higher for
countries in group L than the correlation for countries in group H. The correlation between the
two variables increased for countries in group H as the years progressed while the correlation
between exports per capita and stock per capita decreased with the progress in years.
Table B (correlation by the country group)
Group H Group L
FDI per
capita
Exports per
capita
FDI per
capita
Exports per
capita
1995
FDI per capita 1 1
Exports per capita 0.796** 1 0.945** 1