Regression analysis of export flows of Malaysia

Abstract

The import demand equations to be applied to export flows of Malaysia, given in Chapter 7, will be repeated here for reasons of convenience:

$$\begin{gathered} In{\text{ }}M_{ijt}^k = m_{ij0}^k + m_{ij1}^kIn\hat Y_{it}^k + m_{ij2}^kInP_{{m_{ijt}}}^{{k^*}}/P_{{m_{it}}}^{{K^*}} \hfill \\ where: \hfill \\ \hat Y_{it}^k = C_{it}^pfor{\text{ k }} \in {\text{ }}1 \hfill \\ {\text{ = }}Z_{it}^Ifor{\text{ k }} \in {\text{ }}2,5'and6 \hfill \\ {\text{ = }}Z_{it}^Afor{\text{ k }} \in {\text{ }}56 \hfill \\ {\text{ = }}{I_{it}}for{\text{ k }} \in {\text{ 7}} \hfill \\ {\text{ = }}{Y_{it}}for{\text{ k }} \in {\text{ }}3,8 \hfill \\ \end{gathered}$$

((8.1.1.))

The selection of the relevant explanatory variable for each category of commodities, was based on the purpose for which each is imported. Here, the purpose of the regression analysis is to determine whether that criterion leads to a choice of demand variables which also gives a better fit, in the statistical sense, than any of the other demand variables considered.