Question
A researcher is investigating the determinants of firm labour productivity using data for the year 2014 for a sample of manufacturing firms from the electronics
A researcher is investigating the determinants of firm labour productivity using data for the year 2014 for a sample of manufacturing firms from the electronics industry. She uses the following model:
LP = b0 + b1 CAPIN - b2 W + b3 SIZE + b4 RD
where:
LP is the firm's labour productivity (measured as turnover per employee, in 000s);
CAPIN is the firm's capital intensity (measured as total assets per employee, in 000s);
W is the firm's average wage per employee, in 000s;
SIZE is an indicator of the size of the firm (measured by the log of its turnover, in 000s);
RD is the firm's R&D intensity (measured as the firm's R&D expenditure divided by its turnover), an indicator of how innovative the firm is.
The results of the estimation are:
Variables | Coefficients | Standard Errors | t-values | p-values |
CAPIN | 0.364 | 0.014 | 25.990 | 0.000 |
W | 1.333 | 0.428 | 3.110 | 0.002 |
SIZE | 3.237 | 5.822 | 0.560 | 0.579 |
RD | -21.982 | 11.867 | -1.850 | 0.066 |
Constant | 19.039 | 61.513 | 0.310 | 0.757 |
Note: The researcher is using a 5% significance level.
Select the terms from the drop down lists to complete the sentences below correctly:
From the results of the estimation we can conclude that:
a) the variable CAPIN ( is or is not) associated with the firm's productivity because the magnitude of the p-value of the CAPIN variable is (higher/lower) than the significance level;
b) the variable RD (is not/is) associated with the firm's productivity because the p-value of the RD variable is (higher/lower) than the significance level.
chose between the two words in a and b
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