Results

In this section of the report, the major results from the OLS regression multivariate model will
be discussed. The time series data on 6 variables which are Net trade in goods and services -
the main dependent variable, GDP, inflation of consumer price index, taxes on international
trade, FDI (foreign direct investment), and official exchange rate – 5 independent variables
possibly having relationship with trade balance.
In the tables below, the results of the regression analysis were illustrated.
Number of
obs = 28
Source SS df MS F(5,22) = 6.41
Model 6.95E+19 5 1.39E+19 Prob > F = 0.0008
Residual 4.77E+19 22 2.17E+18 R-squared = 0.5931
Total 1.17E+20 27 4.34E+18 Adj R-squared = 0.5006
Root MSE = 1.50E+09

nettradeingoodsandservicesbop
cur Coef. Std. Err. t P>|t| [95% Conf. Interval]

0.075738 0.025644 0.128921

gdpcurrentus 6 1 2.95 0.007 0.022556 3
inflationconsumerpricesannualf -
pc 613770.2 654876.2 0.94 0.359 744359.8 1971900
taxesoninternationaltradecurre 0.641750 - 0.226478
nt -1.10443 2 -1.72 0.099 2.435339 3
foreigndirectinvestmentnetbopc 0.444755
ur 1.69059 7 3.8 0.001 7.68E-01 2.612957
-
officialexchangeratelcuperusperi 2.16E+09 1.52E+09 1.42 0.169 9.93E+08 5.32E+09
- -
_cons 2.58E+09 6.58E+08 -3.92 0.001 3.94E+09 -1.21E+09

From the division of sum of squares of model (SSM) by total sum of squares, the value of R-
squared of 0.5931 is found which illustrates that 59% of the changes to the independent
dependent variable are explained by these 5 independent variables.
From the t and p values, the significance rate of each of the variables can be estimated. For
instance, GDP (current US), FDI (foreign direct investment) and constant (intercept) values are
statistically significant, meaning that in 95% confidence interval, these values have strong
relationship with trade balance. In the case of 90% confidence level, the taxes on international
trade could also be concluded to have statistically significant relationship with trade balance.
Other factors which are official exchange rate and inflation of CPI were failed to prove to have
statistically significant relationship with trade balance. Regardless of these, the general
probability of the regression analysis indicates the explanation to be significant (with 0.0008 <
0.05).
Thus, we have the following equation:

Trade balance=−2.58∗10 +0.076∗[ GDP ( current US ) ] + 6.14∗10 ∗[ Inflation , CPI ] −1.1∗[ taxes on∫ . trad
9 5
From the equation above (considering the coefficients), it can be concluded that the GDP
(current US), inflation CPI, net FDI, and official exchange rate have positive relationship to trade
balance, while taxes on international trade usually have negative impact on trade balance.
Discussion.
As indicated by the research, the increase in the GDP influences the trade balance positively
and increases it to certain extent. Similar conclusion was illustrated in the research by
________, who similarly determined the strong statistical relationship between GDP value and
trade balance in Belarus. Similarly, the FDI (foreign direct investment) has a potential to
increase the trade balance which supports the conclusions by __________. These two
independent variables are unequivocally significant; thus the research reinforces the
conclusions statistically.
Furthermore, inflation of the consumer price index and official exchange rate have parallel
positive impact on trade balance. However, the statistical analysis was unable to prove such
relationship to high significance level, which was attained by ___________ and
______________. Thus, the research cannot reinforce or disprove the conclusions by these
authors. Taxes on international income are similar to inflation CPI and official exchange rate,
with the difference in the character of influence on trade balance – it adversely influences the
trade balance. Although it is not statistically significant at 95% level of confidence, it astutely
fills to the confidence level of 90%.
It can also be added that while the authors such as ___________ and ___________ achieved
similar results using the similar or diverse methods of statistical analysis for distinct period of
time, this research illustrates that the resembling influential factors remain in more current
period considered. The significance of the GDP and FDI were achieved at the same confidence
level without the usage of logarithmic transformation, although this was suggested by other
authors who considered latter factors.