Country Code GDP Per capita Governance Effectiveness Score Rule of Law Score

1 1710.57541109 -1.45 -1.85

2 1699.4881102 -1.44844388961792 -1.896546125412
3 1914.77422838 -1.36019587516785 -1.6430809497833
4 2015.51477467 -1.38538241386414 -1.5973478555679
5 2069.42402167 -1.33201479911804 -1.4457609653473
6 2087.30532307 -1.32317626476288 -1.5040860176087
7 1981.11806851 -1.22640132904053 -1.4984782934189
8 2058.40022107 -1.32554519176483 -1.5624228715897
9 2082.63564821 -1.45309603214264 -1.6640380620957
10 2152.36648942 -1.46306502819061 -1.7137138843536
12 6587.98693898 -1.12 -1.27
13 6710.75062299 -1.15352869033813 -1.2653217315674
14 7412.96703464 -0.98969954252243 -1.2694836854935
15 7682.47538649 -1.22358989715576 -1.2679443359375
16 8179.29782813 -1.12424767017365 -1.1182445287705
17 7337.56982205 -1.00032651424408 -1.0819892883301
18 7103.22643061 -1.03597033023834 -1.0875540971756
19 7310.89658896 -1.02603435516357 -1.1011681556702
20 7099.9719581 -1.04500186443329 -1.0483428239822
21 6952.41936237 -1.11753988265991 -1.0545973777771
23 9628.72196178 -0.28 -0.41
24 10207.7675732 -0.208234116435051 -0.4553453624249
25 10526.2591834 -0.267890125513077 -0.5202895998955
26 10570.963733 -0.317146986722946 -0.5180738568306
27 11259.2675138 -0.0859348401427269 -0.3379573523998
28 11658.9055171 0.0100207813084126 -0.3283078968525
29 12078.8431362 0.0130421472713351 -0.3289996087551
30 12770.964291 0.0768489390611649 -0.4043230712414
31 13483.0116137 0.0572398602962494 -0.4033851027489
32 14012.9764354 -0.0622132010757923 -0.4110932648182
33 13439.6652781 -0.135743156075478 -0.3582943379879
34 64882.8503412 0.90 0.32
35 67686.3853799 1.05516362190247 0.5047616362572
36 69102.4761705 1.14947521686554 0.5394836068153
37 70374.2353628 1.17645633220673 0.6189436912537
38 73619.0446557 1.43544006347656 0.6521480083466
39 64901.8800512 1.50926744937897 0.6407622098923
40 63968.8880392 1.41548466682434 0.8490659594536
41 67183.6053112 1.4181911945343 0.8007954955101
42 68576.1155227 1.42993092536926 0.8065467476845
43 71150.5421414 1.37689065933228 0.8403460383415
44 66771.4997535 1.32550311088562 0.9169418811798
45 18061.9343589 -0.16 -0.59
46 19322.2271237 -0.120088316500187 -0.5608632564545
47 19641.3528638 -0.238666549324989 -0.679646551609
48 20131.6804247 -0.277767658233643 -0.7077284455299
49 19683.7715056 -0.159526452422142 -0.8861387968063
50 20105.1989918 -0.0752744078636169 -0.7708782553673
51 20307.8700521 0.161878138780594 -0.3937469422817
52 23597.1177528 0.144593343138695 -0.2492861449718
53 23293.3986338 0.0272681787610054 -0.2436714023352
54 22999.2750526 -0.0869983658194542 -0.4306341707706
55 20770.7264196 -0.216941729187965 -0.4693714976311
56 7506.32190856 -0.18 -0.49
57 8025.45848492 -0.128990575671196 -0.4409415721893
58 9364.37529918 -0.0423688255250454 -0.4178914427757
59 9835.80246092 0.0688658431172371 -0.3442721366882
60 10036.8898406 -0.198449701070786 -0.366001278162
61 9969.66485398 -0.161071106791496 -0.3879299461842
62 10704.2297625 -0.15837724506855 -0.1192339807749
63 12115.1392903 -0.102695219218731 -0.1606278866529
64 13020.3963186 -0.0284142252057791 -0.1494592428207
65 14231.1801885 -0.0666463002562523 -0.1309799551964
66 13312.1138601 -0.124236114323139 -0.0832231342793
67 39336.6634845 1.77 1.76
68 42003.158056 1.69581401348114 1.7425144910812
69 42836.6718636 1.62129044532776 1.766857624054
70 45906.4400399 1.64005541801453 1.7785352468491
Corruption Control Score Regulatory Quality Political Stability Voice and Accountability
-1.64 -1.53 -2.57915186882 -1.40
-1.57917392253876 -1.54058647155762 -2.502059698105 -1.33597695827484
-1.41974139213562 -1.19311785697937 -2.418561458588 -1.26743006706238
-1.43651032447815 -1.19313704967499 -2.519349098206 -1.24006831645966
-1.35482883453369 -1.11818218231201 -2.411068439484 -1.13544499874115
-1.34221589565277 -0.99737113714218 -2.571221828461 -1.11756300926209
-1.52617156505585 -1.32768762111664 -2.671053886414 -1.03783750534058
-1.51562559604645 -1.33669102191925 -2.801083803177 -0.99085408449173
-1.487624168396 -1.13327717781067 -2.763864278793 -1.01160335540771
-1.40073299407959 -1.120689868927 -2.655531167984 -1.00679242610931
-1.33 -1.04 -0.23 -1.12
-1.34427726268768 -1.09777557849884 -0.369237810373 -1.12547838687897
-1.26847016811371 -0.96977812051773 -0.389322549105 -1.07624673843384
-1.30946338176727 -1.05422425270081 -0.391233474016 -1.11384344100952
-1.44394373893738 -0.98845893144608 -0.333232045174 -1.14549398422241
-1.39501357078552 -0.90918552875519 -0.50089776516 -1.1772483587265
-1.43952822685242 -1.00137972831726 -0.315898835659 -1.13959991931915
-1.41095280647278 -1.04222846031189 -0.380449026823 -1.09793853759766
-1.13919198513031 -0.87768256664276 -0.335691779852 -0.906303405761719
-1.05445063114166 -0.89403748512268 -0.358524978161 -0.783532202243805
-0.53 0.23 -0.19 0.12
-0.682986557483673 0.232935979962349 -0.282379418612 0.0623337626457214
-0.726490914821625 0.199168846011162 -0.143631592393 0.0220640543848276
-0.69843190908432 0.209718719124794 0.091929785907 0.0488925836980343
-0.548163533210754 0.221990346908569 0.485986232758 0.143760740756989
-0.479035079479218 0.186667814850807 0.346129059792 0.157148644328117
-0.405148833990097 0.189022064208984 0.344644665718 0.170926734805107
-0.420721828937531 0.223364010453224 0.378474771976 0.203784555196762
-0.478632122278214 0.254197269678116 0.37051564455 0.180733799934387
-0.533088803291321 0.273867726325989 0.111168630421 0.142710745334625
-0.540196061134338 0.23713107407093 0.083936318755 0.087339922785759
0.90 0.32 0.80 -0.90
1.07758748531342 0.44924059510231 0.91217571497 -0.89624410867691
1.16315269470215 0.676251769065857 0.863251447678 -1.00081920623779
1.28080201148987 0.780733346939087 0.894792199135 -1.01948356628418
1.20378649234772 0.992053806781769 0.768908917904 -1.06136858463287
1.07231938838959 1.11105895042419 0.759545385838 -1.11242532730103
1.17173707485199 0.972595632076263 0.564748942852 -1.05037081241608
1.13643836975098 1.01522088050842 0.618641376495 -1.09684681892395
1.15207839012146 0.930290281772614 0.704976201057 -1.12692523002625
1.10667335987091 0.979413986206055 0.685608506203 -1.14014911651611
1.11439597606659 1.0834037065506 0.626468300819 -1.18430542945862
-0.36 -0.76 -0.08 0.36
-0.366130083799362 -0.72220993041992 0.158993661404 0.344941824674606
-0.443185955286026 -0.92921715974808 0.103040546179 0.295209914445877
-0.432139277458191 -0.95726102590561 0.065314263105 0.276987880468369
-0.541584193706512 -1.07425677776337 -0.005121871363 0.345320522785187
 -0.547077298164368 -0.91144192218781 0.014785380103 0.411787539720535
-0.28393092751503 -0.46962532401085 0.204625502229 0.493350893259048
-0.25818082690239 -0.2898895740509 0.169504255056 0.52864807844162
-0.0687872767448425 -0.29067134857178 0.010891375132 0.532346129417419
-0.0762876197695732 -0.49322953820229 -0.091444201767 0.574006080627441
-0.116381615400314 -0.56730854511261 0.036436758935 0.594153821468353
-0.70 0.31 0.07 -0.85
-0.656862676143646 0.27320671081543 -0.06386898458 -0.690779805183411
-0.587804913520813 0.349336951971054 0.154794976115 -0.570491433143616
-0.531793713569641 0.252607047557831 0.110385142267 -0.588030755519867
-0.523960769176483 0.213424488902092 -0.297135800123 -0.562082946300507
-0.533839821815491 0.241806879639626 -0.252332627773 -0.536293566226959
-0.571828007698059 0.250055581331253 -0.662263810635 -0.579281389713287
-0.563313245773315 0.28052219748497 -0.620771169662 -0.560828626155853
-0.347599595785141 0.327959209680557 -0.44490814209 -0.137943789362907
-0.178283751010895 0.249007001519203 -0.413424372673 0.0554765909910202
0.031596977263689 0.250047862529755 -0.571294367313 0.0446616150438786
2.03 1.70 0.89 1.42
2.04471039772034 1.85860860347748 0.935710072517 1.45372104644775
1.98524856567383 1.78646779060364 0.997997224331 1.49919033050537
1.78522562980652 1.80086755752563 1.031072974205 1.43641376495361
 1.DDESCRIPTIVE STATISTICS

GDP Per capita Governance Effectiveness Score

Mean 21854.75135 Mean -0.103294700261

Standard Error 2729.412395 Standard Error 0.1156191049596
Median 12096.99121 Median -0.132366865873
Mode #N/A Mode #N/A
Standard Deviation 22507.3112 Standard Deviation 0.953419564176
Sample Variance 506579057.3 Sample Variance 0.9090088653536
Kurtosis 0.31009172 Kurtosis -0.714477996339
Skewness 1.338549701 Skewness 0.419269095198
Range 71919.55655 Range 3.2315325737
Minimum 1699.48811 Minimum -1.463065028191
Maximum 73619.04466 Maximum 1.7684675455093
Sum 1486123.092 Sum -7.02403961774
Count 68 Count 68
Largest(1) 73619.04466 Largest(1) 1.7684675455093
Smallest(1) 1699.48811 Smallest(1) -1.463065028191
Confidence Level(95.0%) 5447.929941 Confidence Level(95.0%) 0.2307766993844

5.Discuss the major limitations of the data & the study?

 Rule of Law Score Corruption Control Score

Mean -0.396032008 Mean -0.32795593367

Standard Error 0.10917018403 Standard Error 0.12303784084
Median -0.4144923538 Median -0.53244125843
Mode #N/A Mode #N/A
Standard Deviation 0.90024039987 Standard Deviation 1.01459602743
Sample Variance 0.81043277756 Sample Variance 1.02940509887
Kurtosis 0.17481428477 Kurtosis -0.22010518745
Skewness 0.64192445362 Skewness 0.83925763377
Range 3.67508137226 Range 3.6808873415
Minimum -1.8965461254 Minimum -1.63617694378
Maximum 1.77853524685 Maximum 2.04471039772
Sum -26.930176541 Sum -22.3010034896
Count 68 Count 68
Largest(1) 1.77853524685 Largest(1) 2.04471039772
Smallest(1) -1.8965461254 Smallest(1) -1.63617694378
Confidence Level(95.0%) 0.21790459934 Confidence Level(95.0%) 0.24558455817
 Regulatory Quality Political Stability

Mean -0.1164987771 Mean -0.268390382

Standard Error 0.10818599385 Standard Error 0.1294834909
Median 0.20444378257 Median 0.0028847519
Mode #N/A Mode #N/A
Standard Deviation 0.89212455974 Standard Deviation 1.0677482195
Sample Variance 0.79588623009 Sample Variance 1.1400862602
Kurtosis -0.735764504 Kurtosis 0.8603943603
Skewness 0.32179614782 Skewness -1.322484257
Range 3.39919507504 Range 3.8321567774
Minimum -1.5405864716 Minimum -2.801083803
Maximum 1.85860860348 Maximum 1.0310729742
Sum -7.9219168425 Sum -18.25054596
Count 68 Count 68
Largest(1) 1.85860860348 Largest(1) 1.0310729742
Smallest(1) -1.5405864716 Smallest(1) -2.801083803
Confidence Level(95.0%) 0.21594014752 Confidence Level(95.0%) 0.2584501295
Voice and Accountability

Mean -0.3954237251
Standard Error 0.0945622147
Median -0.5836560726
Mode #N/A
Standard Deviation 0.7797799987
Sample Variance 0.6080568463
Kurtosis -0.3968212402
Skewness 0.7131958511
Range 2.9036585093
Minimum -1.4044681787
Maximum 1.4991903305
Sum -26.888813308
Count 68
Largest(1) 1.4991903305
Smallest(1) -1.4044681787
Confidence Level(95.0%) 0.1887469705
 2.CORRELATION MATRIX

GDP Per Governance Effectiveness

capita Score
GDP Per capita 1
Governance Effectiveness0.873332018695947 1
Rule of Law Score 0.79475994477659 0.971002909258778
Corruption Control Score0.880611040509671 0.974888320320649
Regulatory Quality 0.688145255278453 0.913244044761563
Political Stability 0.646494177713039 0.807425663801127
Voice and Accountability 0.0124693947459002 0.392540454156489
 Rule of Corruption Regulatory Political Voice and
Law Score Control Score Quality Stability Accountability

1
0.968598157947152 1
0.948647524881078 0.882810418757492 1
0.794511612062247 0.741166075046816 0.73079732961369 1
0.463281467968501 0.408206911976568 0.39332098119926 0.4460832714734 1
 III) OLS REGRESSION OUTPUT

1. Regression output of GDP Per Capita and Governance effectiveness score

SUMMARY OUTPUT
Regression Statistics
Multiple R 0.873332018695947
R Square 0.762708814879537
Adjusted R Square 0.759113493892864
Standard Error 0.467940134627749
Observations 68

ANOVA
df SS MS F Significance F
Regression 1 46.451707985391 46.451708 212.13928261 2.701911944E-22
Residual 66 14.451885993299 0.218968
Total 67 60.90359397869

Coefficients Standard Error t Stat P-value Lower 95%

Intercept -0.91180525969289 0.0793821953643 -11.48627 2.163784E-17 -1.070296926455
GDP Per capita 3.69947269729E-05 2.539974044E-06 14.565002 2.701912E-22 3.192350517E-05

2. Regression output of GDP Per Capita and Rule of Law score

SUMMARY OUTPUT

Regression Statistics
Multiple R 0.79475994477659
R Square 0.631643369821289
Adjusted R Square 0.626062208757975
Standard Error 0.550501083369921
Observations 68

ANOVA
df SS MS F Significance F
Regression 1 34.297600872379 34.297601 113.17418771 5.936042798E-16
Residual 66 20.001395224236 0.3030514
Total 67 54.298996096615

Coefficients Standard Error t Stat P-value Lower 95%

Intercept -1.09076308079024 0.0933879813132 -11.67991 1.027402E-17 -1.277218201438
GDP Per capita 3.17885599132E-05 2.98811399E-06 10.638336 5.936043E-16 2.582259784E-05

3. Regression output of GDP Per Capita and corruption control score

SUMMARY OUTPUT

Regression Statistics
Multiple R 0.880611040509671
R Square 0.775475804667525
Adjusted R Square 0.772073922920063
Standard Error 0.484384419560098
Observations 68

ANOVA
df SS MS F Significance F
Regression 1 53.484676074369 53.484676 227.95495618 4.32108074E-23
Residual 66 15.48546555023 0.2346283
Total 67 68.970141624599

Coefficients Standard Error t Stat P-value Lower 95%

Intercept -1.19551596875767 0.0821718330605 -14.54898 2.856559E-22 -1.359577326886
GDP Per capita 3.96966325995E-05 2.629233447E-06 15.098177 4.321081E-23 3.444719865E-05

4. Regression output of GDP Per Capita and regulatory quality

SUMMARY OUTPUT

Regression Statistics
Multiple R 0.688145255278453
R Square 0.473543892362247
Adjusted R Square 0.465567284670766
Standard Error 0.652186812993389
Observations 68

ANOVA
df SS MS F Significance F
Regression 1 25.251433239519 25.251433 59.366576705 8.93213496E-11
Residual 66 28.072944176803 0.4253476
Total 67 53.324377416322

Coefficients Standard Error t Stat P-value Lower 95%

Intercept -0.71261078372413 0.1106381290509 -6.440915 1.577714E-08 -0.933506935567
GDP Per capita 2.72760827589E-05 3.540063043E-06 7.7049709 8.932135E-11 2.020811885E-05

5. Regression output of GDP Per Capita and political stability

SUMMARY OUTPUT
 Regression Statistics
Multiple R 0.646494177713039
R Square 0.417954721816859
Adjusted R Square 0.409135853965599
Standard Error 0.820753370095475
Observations 68

ANOVA
df SS MS F Significance F
Regression 1 31.925797193114 31.925797 47.393240138 2.600402859E-09
Residual 66 44.459982238523 0.6736361
Total 67 76.385779431637

Coefficients Standard Error t Stat P-value Lower 95%

Intercept -0.93866955905127 0.139234059123 -6.741666 4.653261E-09 -1.216659327403
GDP Per capita 3.06697233219E-05 4.455040511E-06 6.8842748 2.600403E-09 2.177494795E-05

6. Regression output of GDP Per Capita and voice and accountability

SUMMARY OUTPUT

Regression Statistics
Multiple R 0.012469394745873
R Square 0.000155485805328
Adjusted R Square -0.01499367350065
Standard Error 0.785604131942023
Observations 68

ANOVA
df SS MS F Significance F
Regression 1 0.006334461965 0.0063345 0.010263659 0.919611750612
Residual 66 40.733474240209 0.6171739
Total 67 40.739808702174

Coefficients Standard Error t Stat P-value Lower 95%

Intercept -0.40486519731884 0.1332712799478 -3.037903 0.003410702 -0.670949892931
GDP Per capita 4.32010049217E-07 4.264250822E-06 0.1013097 0.9196117506 -8.08184142E-06
TPUT

Upper 95% Lower 95.0% Upper 95.0%

-0.7533135929 -1.070296926455 -0.753313593
4.2065949E-05 3.192350517E-05 4.2065949E-05

Upper 95% Lower 95.0% Upper 95.0%

-0.9043079601 -1.277218201438 -0.90430796
3.7754522E-05 2.582259784E-05 3.7754522E-05

Upper 95% Lower 95.0% Upper 95.0%

-1.0314546106 -1.359577326886 -1.031454611
4.4946067E-05 3.444719865E-05 4.4946067E-05

Upper 95% Lower 95.0% Upper 95.0%

-0.4917146319 -0.933506935567 -0.491714632
3.4344047E-05 2.020811885E-05 3.4344047E-05
 Upper 95% Lower 95.0% Upper 95.0%
-0.6606797907 -1.216659327403 -0.660679791
3.9564499E-05 2.177494795E-05 3.9564499E-05

Upper 95% Lower 95.0% Upper 95.0%

-0.1387805017 -0.670949892931 -0.138780502
8.9458615E-06 -8.08184142E-06 8.9458615E-06
4.Derive & Interpret VIF test results .Interpret how Multicolinearity can cause a problem in interpreting the resul

Multicolinearity statistics:

GDP Per Governance Corruption Control

Statistic Rule of Law Score
capita Effectiveness Score Score

R² 0.975 0.983 0.985 0.988

Tolerance 0.025 0.017 0.015 0.012
VIF 39.708 58.554 68.735 82.221

R²
1

0.9

0.8

0.7

0.6

0.5
R²

0.4

0.3

0.2

0.1

0
GDP Per capita Governance Effec- Rule of Law Score Corruption Control Regulatory Quality Political Stability Voice and Ac-
tiveness Score Score countability

Variables

In factor analysis, principle component analysis is used to drive the common score of multicollinearity variables.
A rule of thumb to detect multicollinearity is that when the VIF is greater than 10, then there is a problem of mu
In the result box ,we can see that 5 value of VIF is greater than 10; thease are - GDP per capita, Governance Effec
Rule of Law Score,Corruption Control Score & Regulatory Quality.On the other hand, political stability , voice and
Thereby, these two have no multicolinearity problem .
 problem in interpreting the results?

Political Voice and

Regulatory Quality
Stability Accountability

0.956 0.785 0.866

0.044 0.215 0.134
22.789 4.642 7.469

Tolerance
1

0.9

0.8

0.7

0.6
Tolerance

0.5

0.4

0.3

0.2

0.1

ality Political Stability Voice and Ac- 0

countability GDP Per Governance Rule of Law Corruption Regulatory Political Voice and
capita Effectiveness Score Control Score Quality Stability Accountabil-
Score ity

Variables

ore of multicollinearity variables.

10, then there is a problem of multicollinearity.
GDP per capita, Governance Effectiveness Score,
hand, political stability , voice and accountability has lower value than 10 .
 VIF
90

80

70

60

50

40
VIF

30

20

10

Voice and 0
Accountabil- GDP Per Gover- Rule of Law Corruption Regulatory Political Voice and
ity capita nance Ef - Score Control Quality Stability Account-
fectiveness Score ability
Score

Variables
 v) Discuss major limitations of the data & the study.

Statistics is an important branch of mathematics that deals with the collection, analysis, interpretation, and presentation of
It is widely used in various fields such as finance, economics, science, social sciences, and engineering. However, like any oth
field, statistics also has its limitations. 
 retation, and presentation of data.
neering. However, like any other
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XLSTAT 2023.1.4.1408 - Multicolinearity statistics - Start time: 06/01/2023 at 16:34:07 / End time: 06/01/2023 at 16:34:
Observations/variables table: Workbook = SOLUTION.xlsx / Sheet = Sheet1 / Range = 'Sheet1'!$B$1:$H$69 / 68 rows an

Summary statistics:
Obs.
Obs. with
Observati without Std.
Variable missing Minimum Maximum Mean
ons missing deviation
data data
GDP Per ca 68 0 68 1699.488 73619.045 21854.751 22507.311
Governance 68 0 68 -1.463 1.768 -0.103 0.953
Rule of La 68 0 68 -1.897 1.779 -0.396 0.900
Corruption 68 0 68 -1.636 2.045 -0.328 1.015
Regulatory 68 0 68 -1.541 1.859 -0.116 0.892
Political St 68 0 68 -2.801 1.031 -0.268 1.068
Voice and A 68 0 68 -1.404 1.499 -0.395 0.780

Correlation matrix:
Governan
Corruptio Voice and
GDP Per ce Rule of Regulatory Political
Variables capita Effectiven Law Score n Control Quality Stability Accountabi
ess Score Score lity
GDP Per ca 1 0.873 0.795 0.881 0.688 0.646 0.012
Governance 0.873 1 0.971 0.975 0.913 0.807 0.393
Rule of La 0.795 0.971 1 0.969 0.949 0.795 0.463
Corruption 0.881 0.975 0.969 1 0.883 0.741 0.408
Regulatory 0.688 0.913 0.949 0.883 1 0.731 0.393
Political St 0.646 0.807 0.795 0.741 0.731 1 0.446
Voice and A 0.012 0.393 0.463 0.408 0.393 0.446 1

Multicolinearity statistics:
Governan
Corruptio Voice and
GDP Per ce Rule of Regulatory Political
Statistic n Control Accountabi
capita Effectiven Law Score Quality Stability
Score lity
ess Score
R² 0.975 0.983 0.985 0.988 0.956 0.785 0.866
Tolerance 0.025 0.017 0.015 0.012 0.044 0.215 0.134
VIF 39.708 58.554 68.735 82.221 22.789 4.642 7.469
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End time: 06/01/2023 at 16:34:08 / Microsoft Excel 16.016327

eet1'!$B$1:$H$69 / 68 rows and 7 columns