Phan Qunh Anh EBBA 3B

Wood, bamboo, rattan processing and production of wood, bamboo and rattan products I. INTRODUCTION With using the data given about the wood processing industry of Hanoi and Ho Chi Minh City, in this essay, I deeply analysis statistics and build and test several models, which show the relationship about some major variables such as Gross Output (GO), Income, Labor, Ratiokl, Value Added (VA), Wage Using the Eviews tool, I use the descriptive statistic to get some general information; then run regressions models and some Cobb- Douglas form models, test and interpret the result respectively with a number of important variables. Last but not least, at every models below, I also use Ramsey RESET and White test (no-cross term) to see whether those model are good and efficient or not II. ANALYSIS The descriptive statistics table of enterprise in Hanoi
Mean Median Maximum Minimum Std. Dev. Skewness Kurtosis Observations GO 8946.905 1228.000 461989.0 -350.0000 39377.02 9.464883 100.7911 199 INCOME 641.5075 234.0000 18622.00 20.00000 1718.765 7.423509 69.63442 199 LABOR 27.36683 12.00000 780.0000 1.000000 73.73381 7.529194 67.79692 199 RATIOKL 325.9771 200.6900 1552.490 18.24000 262.2834 2.246610 7.720232 199 VA 2376.531 280.6600 151501.7 -69.72000 11921.68 10.68123 128.0846 199 WAGE 637.0050 234.0000 18622.00 20.00000 1708.169 7.484447 70.79686 199

The descriptive statistics table of enterprise in Ho Chi Minh City

Mean Median Maximum Minimum Std. Dev. Skewness Kurtosis Observations GO 11719.32 1729.000 524320.0 -23.00000 47909.35 7.482883 67.20163 344 INCOME 866.4855 188.0000 51977.00 0.000000 3662.757 10.84969 136.2146 344 LABOR 29.30233 8.000000 1355.000 1.000000 101.8857 10.31096 122.8665 344 RATIOKL 225.0890 76.45833 2476.360 8.593265 283.0269 3.725004 24.54467 344 VA 3700.330 430.5050 394553.4 -4.580000 23715.81 13.91567 220.2977 344 WAGE 858.2791 181.5000 51977.00 0.000000 3656.236 10.87182 136.7690 344

According to these two table above, the mean of GO in Ho Chi Minh City (11719.32) is seen to be higher than in Hanoi (8964.905). It points out that the market elements in Ho Chi Minh City are more important while Hanoi is just more noticed to some inside elements. Although almost other variables such as Income, Value Added or Wage in Ho Chi Minh City is higher than in Hanoi, the mean of Labor still has not a big difference. It means in Ho Chi Minh, the Labor force is used more efficient and make more productivity and gross output than in Hanoi. Secondly, the correlation matrix table below shows the relationship between some major variables in Hanoi.

Phan Qunh Anh EBBA 3B

GO INCOME LABOR RATIOKL WAGE VA

GO 1.000000 0.233380 0.216186 0.068744 0.233203 0.986289

INCOME 0.233380 1.000000 0.969307 -0.050740 0.999860 0.216923

LABOR 0.216186 0.969307 1.000000 -0.097046 0.968683 0.196084

RATIOKL 0.068744 -0.050740 -0.097046 1.000000 -0.049184 0.081668

WAGE 0.233203 0.999860 0.968683 -0.049184 1.000000 0.217023

VA 0.986289 0.216923 0.196084 0.081668 0.217023 1.000000

. The more the number is, the stronger the correlation has. In particularly, GO has the strongest correlation with VA and the weakest correlation with RATIOKL. Income and Labor have the strongest correlation with Wage. Thirdly, it is the model that show the relationship between GO and LABOR in Hanoi. Model: GO depends on Labor.
Dependent Variable: GO Method: Least Squares Date: 04/24/13 Time: 20:08 Sample(adjusted): 1 199 Included observations: 199 after adjusting endpoints Variable Coefficient Std. Error t-Statistic C 5787.336 2915.278 1.985175 LABOR 115.4525 37.14921 3.107804 R-squared 0.046736 Mean dependent var Adjusted R-squared 0.041897 S.D. dependent var

Prob. 0.0485 0.0022 8946.905 39377.02

The slope is significant with P-value less than 5%. When LABOR increases 1 unit, GO also increases 115.45. Besides, about 4.67% of total of GO is explained by Labor. We have GO = 5787.336 + 115.4525 Labor + e Based on White Heteroskedasticity Test, P-value is more than 5% -> Not reject Ho. Therefore, this model is homoscedasticity.

White Heteroskedasticity Test: F-statistic Obs*R-squared 0.875679 1.762417 Probability Probability 0.418202 0.414282

Moreover, there are several models in the Cobb-Douglas form which shows the relationship between some variables. At first, we set the model to show the relationship between GO and Asset in Hanoi.

Phan Qunh Anh EBBA 3B

Model: GO depends on Asset

Dependent Variable: LOG(GO) Method: Least Squares Date: 04/24/13 Time: 02:33 Sample(adjusted): 1 199 Included observations: 174 Excluded observations: 25 after adjusting endpoints Variable C LOG(ASSET) R-squared Adjusted R-squared Coefficient -1.832011 1.127511 0.385573 0.382001 Std. Error 0.897608 0.108527 t-Statistic -2.040994 10.38920 Prob. 0.0428 0.0000 7.414663 1.953274

Mean dependent var S.D. dependent var

This table above shows us the meaning of estimates. Firstly, the slope is significant. Secondly, more than 38% of Go is explained by Asset variable.
Ramsey RESET Test: F-statistic Log likelihood ratio 1.230580 1.247685 Probability Probability 0.268852 0.263995

White Heteroskedasticity Test: F-statistic Obs*R-squared 1.050095 2.111107 Probability Probability 0.352150 0.348000

Model: Go depends on Asset and Labor.

Dependent Variable: LOG(GO) Method: Least Squares Date: 04/24/13 Time: 06:32 Sample(adjusted): 1 199 Included observations: 174 Excluded observations: 25 after adjusting endpoints Variable C LOG(ASSET) LOG(LABOR) R-squared Adjusted R-squared S.E. of regression Sum squared resid Log likelihood Durbin-Watson stat Coefficient 0.656797 0.586503 0.745434 0.445775 0.439292 1.462620 365.8130 -311.5421 1.890656 Std. Error 1.031738 0.162616 0.172962 t-Statistic 0.636593 3.606683 4.309821 Prob. 0.5252 0.0004 0.0000 7.414663 1.953274 3.615427 3.669893 68.76935 0.000000

Mean dependent var S.D. dependent var Akaike info criterion Schwarz criterion F-statistic Prob(F-statistic)

As can be seen on the table above, the two slopes are coefficients statistically significant. About 44.5% of GO is explained by Asset and Labor. It means that these two variables have big impact on the increase of GO in Hanoi.

Phan Qunh Anh EBBA 3B

Similarly, I use White test and Ramsey RESET test then see the Probability is more than 5%, which means this model is completely good and has no problem.
Ramsey RESET Test: F-statistic Log likelihood ratio 1.355316 1.381705 Probability Probability 0.245982 0.239811

White Heteroskedasticity Test: F-statistic Obs*R-squared 0.928760 3.742680 Probability Probability 0.448644 0.441949

According to the Actual, Fitted, Residual Table, many Residual values are negative. That means to be not efficient because the values of these are lower than the average values. Moreover, there are the two models to show the relationship between GO and Wage which is different in two area Hanoi and Ho Chi Minh City. Model: GO depends on Wage In Hanoi
Dependent Variable: LOG(GO) Method: Least Squares Date: 04/24/13 Time: 03:19 Sample(adjusted): 1 199 Included observations: 174 Excluded observations: 25 after adjusting endpoints Variable C LOG(WAGE) R-squared Adjusted R-squared Coefficient 1.172964 1.103014 0.391153 0.387613 Std. Error 0.604973 0.104929 t-Statistic 1.938870 10.51196 Prob. 0.0542 0.0000 7.414663 1.953274

Mean dependent var S.D. dependent var

R-squared which is 0.391153 explains that this model is quite good. Nearly 40% of GO depends on Wage.
Ramsey RESET Test: F-statistic Log likelihood ratio 3.557545 3.582817 Probability Probability 0.060971 0.058380

White Heteroskedasticity Test: F-statistic Obs*R-squared 1.347827 2.700377 Probability Probability 0.262550 0.259191

Phan Qunh Anh EBBA 3B

In Ho Chi Minh City

Dependent Variable: LOG(GO) Method: Least Squares Date: 04/24/13 Time: 08:33 Sample(adjusted): 1 344 Included observations: 342 Excluded observations: 2 after adjusting endpoints Variable C LOG(WAGE) R-squared Adjusted R-squared Coefficient 2.330258 0.925906 0.359590 0.357706 Std. Error 0.382716 0.067012 t-Statistic 6.088739 13.81702 Prob. 0.0000 0.0000 7.516129 1.727222

Mean dependent var S.D. dependent var

R-squared is 0.3595906. It points out that there is not much more difference than in Hanoi, in term of Wage with the GO dependent variable.
Ramsey RESET Test: F-statistic Log likelihood ratio 1.085310 1.093166 Probability Probability 0.298255 0.295771

White Heteroskedasticity Test: F-statistic Obs*R-squared 2.345698 4.668308 Probability Probability 0.097333 0.096892

Beside the dependent variable GO, I also test a model of Income, which depends on Labor and Asset in Hanoi. Model with income is a dependent variable
Dependent Variable: LOG(INCOME) Method: Least Squares Date: 04/24/13 Time: 06:38 Sample(adjusted): 1 199 Included observations: 199 after adjusting endpoints Variable C LOG(LABOR) LOG(ASSET) R-squared Adjusted R-squared Coefficient 2.507787 0.993053 0.068574 0.927108 0.926364 Std. Error 0.197368 0.033848 0.031598 t-Statistic 12.70617 29.33838 2.170222 Prob. 0.0000 0.0000 0.0312 5.611341 1.061891

Mean dependent var S.D. dependent var

R-squared which is 0.927108 explains that this model is quite good and has no problem. It means more than 92.7% of Income is affected by Labor and Asset in Hanoi.

Phan Qunh Anh EBBA 3B

White Heteroskedasticity Test: F-statistic Obs*R-squared 1.962396 7.738767 Probability Probability 0.101808 0.101630

Ramsey RESET Test: F-statistic Log likelihood ratio 0.454594 0.463379 Probability Probability 0.500960 0.496049

III. CONCLUSION By some simple comparison to see the different between Hanoi and Ho Chi Minh City in term of the wood processing and production industry, it can be seen that in Ho Chi Minh has more productivity than in Hanoi. Some statistics here can help the manager analyze then more easy to make decision for the industry of enterprise more profitable.