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A Report on Factors affecting business of a country

Submitted by

Poulami Ghosh

Roll No.-17013

CALCUTTA BUSINESS SCHOOL


ACKNOWLEDGEMENT

I have taken efforts in this project. However, it would not have been possible without the kind
support and help of many individuals and organizations. I would like to extend my sincere thanks
to all of them.

I am highly indebted to Bengal Beverage for their guidance and constant supervision as well as
for providing necessary information regarding the project & also for their support in completing
the project.

I would like to express my gratitude towards Dr. Mukta Mkherjee(Faculty) for her kind co-
operation and encouragement which help me in completion of this project.

My thanks and appreciations also go to Tamal Dutta Chaudhuri (Principal) and sekhar
chaudhri(Director) in developing the project and people who have willingly helped me out with
their abilities.

Date: Signature
INDEX

SERIAL NO. PARTICULARS PAGE NO.

1. Introduction 1

2. Data and methodology 2

3. Findings 2-5

4. Conclusion 6

5. Reference 7
INTRODUCTION

In economy there are two types of factor which influence the economic development of a
country –one is economic factor and non economic factor . In economic development literature,
there is considerable significance attached to the terms ‘economic factors’ and ‘non-economic
factors’ though economic factors are more common and have been more used. The term ‘non-
economic factors’ has been commonly used in economic development studies related to Third
World Countries especially during last forty years. The main economic factors in economic
growth are traditionally land, labour, and capital and the non economic factors include the
orientation of the individual in his society, family, class, race, and religion, rural-urban
differences, national character, size of social unit, effect of culture on institutions, and interaction
of cultural values and economic change. The determinants of economic growth are inter-related
factors influencing the growth rate of an economy.

Denison (1962) affirmed that economic growth is the increase of real GDP or GDP per capita,
an increase of national product that is measured in constant prices. Economic growth is
influences by direct factors like for example human resources (increasing the active population,
investing in human capital), natural resources (land, underground resources), the increase in
capital employed or technological advancements. Economic growth is also influenced by indirect
factors such as institutions (financial institutions, private administrations etc.), the size of the
aggregate demand, saving rates and investment rates, the efficiency of the financial system,
budgetary and fiscal policies, migration of labour and capital and the efficiency of the
government.

Here I have considered many economic factors like GDP, Foreign direct investment through net
inflow and net outflow, export of goods and services , import of goods and services etc.

This study attempted to find the factors that determine economic growth in developing countries.
Like how the net export is changing with GDP in the last 10 years, How trade surplus changes
with time etc.

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DATA AND METHODOLOGY

I have collected the data from The world data bank and IMF where I have taken the data of
Australia. Data are of different economic factor which tells about Australian economy.

Here I have selected the world development indicator and ease of doing business. From world
development indicator I have chosen some factors like GDP(current US$), GDP(constant LCU),
Foreign direct investment, net outflows (BoP, current US$), Foreign direct investment, net
inflows (% of GDP), Foreign direct investment, net (BoP, current US$), Foreign direct
investment, net inflows (BoP, current US$), Foreign direct investment, net outflows (% of GDP),
Imports of goods and services (current US$), Exports of goods and services (% of GDP), Imports
of goods and services (% of GDP), Imports of goods and services (constant LCU), Imports of
goods and services (BoP, current US$), Exports of goods and services (BoP, current US$),
Exports of goods and services (constant LCU), Exports of goods and services (current US$),
Export value index (2000 = 100), Import volume index (2000 = 100) and from ease of doing
business I have chosen Ease of doing business index (1=easiest to 183=most difficult), Time to
resolve insolvency (years), Time required to start a business (days). After getting this data I put it
into a graph and have plotted it. Here I have taken a developed country Australia and compared
its export with GDP then import with GDP ,trade with GDP and Trade surplus over the year.

FINDINGS
To explain the economy of Australia I have chosen some variable regarding Australian
economy- GDP(current US$), IMPORT OF GOODS AND SERVICES(current US$), EXPORT
OF GOODSAND SERVICES(current US$). The data are collected from world data bank. Using
excel I find out the Trade Surplus. After this I plot some graph like change in import of goods
and services &GDP with time Export of goods and services & GDP with time , Trade surplus &
GDP with Time and Trade surplus with Time. This graph help me to compare business economy
in several years.

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 CHANGE N IMPORT OF GOODS AND SERVICES & GDP:

Change in Import of goods and services &


GDP
2000000l
I
& 1500000l
m
1000000l Imports of goods and
p services (current US$)
G 500000l GDP (current US$)
o
D 0l
r
P 1940 1960 1980 2000 2020
t Time

Import of goods and services remains steady but after the year 2000 it increases in an
extent. GDP also increases so much from the year 2000.

 CHANGE IN EXORT OF GOODS AND SERVICES & GDP:

Change in Export of goods and services with


GDP
2000000
E 1500000
& 1000000 Exports of goods and services
x (current US$)
500000
p 0 GDP (current US$)
G
o 1940 1960 1980 2000 2020
D Time
r
P
t
Export of goods and services changes from the year 2000 and GDP also changes rapidly
from 2000.

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 CHANGE IN TRDAE SURPLUS AND GDP WITH TIME:

Change in Trade surplus with GDP


S
1800000
u
1600000
r
T 1400000
p 1200000
r
l 1000000
a P
u 800000 GDP (current US$)
d
s 600000 TRADE SURPLUS
e
& 400000

G 200000

0
D 1940 1960 1980 2000 2020

Time

Here we can see that trade surplus does not change that much with the time. So it is
mostly following the time axis. But in case of GDP it changes slowly from the year
1980 and after that it has rapidly changed from the year 2000 and in the year 2015 it is
highest after that it falls down.GDP is the value at current market price of all goods and
service so it is dependent on trade surplus which balance between import and export. As
trade surplus changes with time GDP is also effected by it .So it is also changed rapidly
after certain time.

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 TRADE SURPLUS WITH TIME:

TRADE SURPLUS
30000

25000
S
T u 20000
r r
a p 15000

TRADE SURPLUS
d l
10000
e u
s 5000

0
1950 1960 1970 1980 1990 2000 2010 2020

Time

From the above figure we can say that trade surplus is continuously changing with the time
series.Here trade surplus is quite steady from the year 1960 to 1980 but after that we can see the
ups and down continuously.

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CONCLUSION

GDP , Import ,Export are the important factor in any country’s economy whether it is a
developed country or developing country. It really effect the Country’s economy. If we talk
about business economy , it is also dependent on this factor. Without export and import we can
not run any business. And GDP also depends on country’s import and export o net export .
whether there is any foreign import and export or not it also considered in GDP. The GDP can
tells up the overview of any country’s economy. As I have chosen Australia , a developed
country the GDP is quite good for Australia which rapidly increases after the year 2000.The
export and Import of the goods and services is also increase after the same year. So we can say
that GDP is nothing but the total economy of any country which includes export , import , net
export , Trade surplus and so many other factor.

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REFERENCE
 http://www.yourarticlelibrary.com/economics/factors-that-
influence-the-economic-development-of-a-country/5942
 http://business.uni.edu/economics/themes/Upreti.pdf
 http://webbut.unitbv.ro/BU2015/Series%20V/BILETIN%20I/38_B
oldeanu%20Constantinescu.pdf
 http://www.pishgam.org/economics/Thesis/Chapt3.pdf
 http://www.yourarticlelibrary.com/economics/factors-that-
influence-the-economic-development-of-a-country/5942
 Principle of Macroeconomics by Soumyen sikdar

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