Taking DécorFurniture.com to the Next Level of E-Commerce

DecorFurniture. com will utilize an off the shelf CRM application in lieu of an ERP system. Customer Relationship Management applications will enhance the marketing, sales, and customer service aspect of DecorFurniture. com by handling the data about the company’s old and future customers. The CRM application will manage the call center function to be added to the company. This will help in reaching the goal of improving the company’s relationship with its customers.Proper training will be given to the agents, briefing them on the CRM application’s goal of improving relationships in order to ensure that the cost of the program will not have to balloon out of proportion before showing results. Business Processes Business Process Improvement is an essential part of Decor Furniture. There are numerous of individuals surfing the internet in this world of fast-paced technology. There is a need for Decor Furniture to keep up with the demands of these individuals, poten tial customers and old patrons. There is a need, therefore, for flexibility in changing the status quo of the e-business.Web design, marketing strategies, web services used, and other applications integrated in the company’s trade must be constantly reviewed for effectiveness in the business’ growth. The online community is a fast-changing thing and Decor Furniture must constantly keep up through the upgrading of software and mechanisms. Business processes constantly monitor workflows or the way the business’ transactions flow from the start to the end. XML will be used for the company’s site. This will help in keeping the web site flexible to change given the simplicity and universality of the code.It will be used as the language to connect the workflow processes involved. The use of Wf-XML will reduce integration costs. It will also be easier to â€Å"operate† as it can be handled by anyone who is XML literate. Decor Furniture will also make use of a language translating web service in order to provide its services in different languages online. This will help in the goal of reaching more individuals with the products it offers. Business Intelligence Planning and Funding As a start-up e-business stemming from an offline company with a small target of customers, Decor Furniture will not yet employ the use of business intelligence.However, it will target the integration of a business intelligence application when the company grows and its customers and sales increase. Waiting and not implementing a business intelligence application immediately will also give ample time for planning the program. Once the business has taken off and funds have increased through the company’s profits and through outside investors attracted through the company’s highly competent marketing strategies, business intelligence will be integrated.Because business intelligence will only be applied once the company is bigger and funds are en ough to sustain the program, OLAP will be an option for Decor Furniture. This is because OLAP is multidimensional and will give a wider array of choices with regard to the tasks that need to be accomplished by the system. Data mining will not be used because some studies have shown that such procedures, such as the Market Basket Analysis, are not effective. Customers may buy a certain product for different reasons not simply because of certain aspects of their identity available in the data to be mined.Assessing Decor Furniture as a Small Business Before the advent of the internet, furniture was viewed in a company’s showroom, ordered, and only then delivered to the customer’s residence or office. This process can be cut short, however, by allowing DecorFurniture. com to go online. The strategy to be applied will involve the creation of a company website which will not only serve as a brochure for the different products but which will also integrate a purchasing featur e where customers can order their products and pay via PayPal or other such B2C systems.This allows the company to reach more individuals than it usually would. Even individuals not living near Decor Furniture’s main stores would be able to view and opt to buy their products. Marketing Included in the strategy planning for Decor Furniture is its aspect as an online market. As stated above, Decor Furniture will be placed on the online market because this broadens its pool of customers. Marketing will include the use of online ads, electronically mailing potential customers, and having different kinds of advertising multimedia, such as commercials on YouTube for the promotion of the products.The company’s site will be made sure to have an attractive and welcoming template. Navigation around the site will be made easier with a site map and promos will be placed on the home page to attract the potential customers to continue on to the viewing of the products. Marketing pro grams will be outsourced. This is to reduce costs, via cheaper labor in the outsourcing companies, and to ensure that the newly started online market of Decor Furniture will be marketed expertly even from the start. Outsourcing may be stopped in the future once the company has gained ground on the World Wide Web. Legal Matters – Privacy, IPR and TaxAlong with the uncharted land of the web, many companies starting an e-business are unsure of the boundaries of their legal rights. Many customers are also afraid of violation of their own rights in purchasing over the internet. Privacy and stealing identity information keep customers on their guard. This will be avoided by including privacy policies or agreement terms on the site as well as by clear explanation of why certain information is being asked of the client. Proper paper work will be filed in the local government to ensure that taxation of the transactions done on the DecorFurniture. com site will be assured.This will ens ure that the e-business’ dealings are legal and accounted for. This is probably the most essential legal aspect the company faces because its main purpose for going online is to be able to establish more customers through an online market. The domain name, company logo and tag lines will be copyrighted as well to protect the company from imitations and posers. Management Issues An important management trend that is good to keep in mind when dealing with online business is outsourcing. Running an e-business entails paying attention to numerous details that aren’t part of what your business is really about.Advertisements, creation of web designs, writing of the site’s content are all things that will be outsource in DecorFurniture. com. Going online has given Decor Furniture access to the entire world as a pool for potential customers. Through international shipping, global service will be offered. Shipping insurance as well as local tax in the customer’s c ountry will not be part of the services available to the international customers. This will extend the possibilities for DecorFurniture. com and will take full advantage of its choice to go online.Conclusion Decor Furniture can maximize its online presence through the use of the various resources it can find available on the internet. Developing a strong presence online is essential in order to attract new customers and to spread the company’s name. Creating an impressive web site and coupling this with effective marketing strategies will help Decor Furniture become a household name when it comes to online purchasing. However, in order for the company to best have its customers keep coming back, it has to establish a good relationship with the.This can be established through CRM applications that will be integrated into the company. Eventual use of business intelligence applications, which will be capable of analyzing sales data, will also assist the company in getting to kno w better the customers and target audience for sales. Decor Furniture has a bright future ahead on the World Wide Web. Unlike many dot com businesses, it has a very good chance at becoming a stable success online. Through careful planning of business strategies and implementation of the same, this e-business will be booming in no time.There are many features of e-business that put it above offline businesses. Numerous aids and options are available to the online company and it can more easily reach a larger audience of individuals. However, there must be proper planning, implementation of these plans, and use of e-business strategies in order for success to be attained. Reference Vindevogel, B. , Van den Poel, Dirk, and Wets, Geert. â€Å"Why promotion strategies based on market basket analysis don’t work. † Expert Systems with Applications, 28 (1991): 583-590.

The Determinant of Economics Growth in the Emerging Markets

MSc BUSINESS ECONOMIC AND FINANCE Title of Project The determinant of economic growth in emerging markets: A case study of China. Tarik TOUAT Student ID: 10034757 August 2011 Project Supervisor: Dr. Helen Solomon. Abstract China has enjoyed a very rapid economic growth over the past decades. The impressive growth was driven by several factors. This study aims to determine those factors which contributed to unprecedented economic growth of China and show the relationship with the economic growth by an empirically investigation.The Ordinary Least Squares (OLS) method is applied in order to estimate a growth model using a time series data from 1984 to 2009. The results shows that trade openness, government size and inflation have a significant effect on economic growth. On the other hand, foreign direct investments, the level of human capital and return on investment have minor impact on economic growth in China. The relationship is established though the vector error correction model ( VECM), the finding is that trade openness, government size and inflation had a positive impact on gross domestic product of China in the long-run. Similar essay: Why Nations Fail Summary Chapter 5Word account: 13. 112 words. Acknowledgements Allow me to pay tribute to my supervisor, Dr. Solomon for kindly supervising this study and giving her time and her knowledge to the success of this project. I take this opportunity to thanks my elder brother Arezki TOUAT who was a model of success and constant source of motivation; I’m here to express my sincere gratitude and I wish him all the best for his wedding day. Dedication I dedicated this work to my parents Mouloud and Saliha TOUAT, who have contributed in an extraordinary way to my studies.To my younger sister Louiza TOUAT who is very special for me. Table of Contents 1INTRODUCTION6 1. 1Main objective7 1. 2Organization of the study7 2OVERVIEW OF THE CHINESE ECONOMY8 2. 1Geopolitical characteristics of China9 2. 1. 1Population9 2. 2Economic reforms in China10 3REVIEW OF LITERATURE12 3. 1Growth models12 3. 1. 1Basic Economic Growth Model12 3. 1. 2The Harrod-Domar model13 3. 1. 3Exogenous growth Solow model14 3. 1. 4The augmented Solow-MRW15 3. 1. 5The growth accounting model16 3. 2The determinants of growth17 3. 2. 1Foreign direct investment17 3. 2. Trade Openness19 3. 2. 3Human capital20 3. 2. 4Government size21 3. 2. 5Inflation22 3. 2. 6Infrastructure23 3. 2. 7Return on investment (Portfolio investment)24 4DATA AND METHODOLOGY25 4. 1Presentation of the data and statistical analysis25 4. 2Description of the variable26 4. 2. 1GDP per Capita26 4. 2. 2Foreign Direct Investment Net Inflows (% of GDP)27 4. 2. 3Trade openness28 4. 2. 4School enrolment, tertiary29 4. 2. 5General government final consumption expenditure30 4. 2. 6Inflation31 4. 2. 7Portfolio investment, bonds32 4. 2. 8Electric power consumption33 4. Descriptive Statistics34 4. 4Methodology35 4. 4. 1Estimation of the general model35 4. 4. 2The hypothesized relationships between GDP and its determinant36 5MODEL ESTIMATION AND FINDING37 5. 1Testing For Stationary using the Augmented Dickey Fuller Test37 5. 1. 1Results of the stationarity test. 39 5. 2Estimation of a Short-Run Growth Model for China41 5. 3Results of Robustness Tests44 5. 3. 1Testing for autocorrelation:44 5. 3. 2Testing for hetereoskedasticity:45 5. 3. 3Testing for non-linear functional form46 5. 4Estimating a long-run growth model for China47 5. 4. Testing for Co-integration: Engle-Granger Approach47 5. 4. 2Results using Engle and Granger Approach49 5. 4. 3Result of Johansen co-integration test. 52 5. 4. 4Vector correction model:55 6CONCLUSION59 LIST OF TABLES AND FIGURES TABLES Table 1: Literature review on foreign direct investment. 18 Table 2: Literature review on inflation. 22 Table 3: Literature review on return on investment24 Table 4: Descriptive statistic. 34 Table 5: ADF Test Statistics in levels39 Table 6: ADF Test Statistics in 1st difference40 Table 7: Estimation of the general growth model by OLS41Table 8: Estimation of the parsimonious model43 Table 9: Summary of the results from test for auto correlation44 Table 10: Summary of the results from test for hetereoskedasticity45 Table 11: Summary of the results from test for non-linear functional form46 Table 12: Testing the residuals from stationarity. 49 Table 13: Estimation of the Error Correction model 549 Table 14: Selecting the Appropriate Lag Length52 Table 15: Determining the number of co-integration vector with the Trace test53 Table 16: Determining the number of co-integration vector with the Maximum Eigenvalue test53Table 17: Unrestricted Johansen54 Table 18: Vector Error Correction Estimates56 FIGURES Figure 1: China nominal GDP per capita26 Figure 2: China- Foreign direct investment27 Figure 3: China -Trade openness. 28 Figure 4:China- School enrolment, tertiary29 Figure 5: China government final consumption expenditure. 30 Figure 6: Inflation in China31 Figure 7: Portfolio investment32 Figure 8: Infrastructure33 Figure 9: Graphs for stationarity in level. 62 Figure 10: Graphs for stationarity in first difference . 63 LIST OF ACCRONYMS GDP: Gross Domestic Product.GNP: Gross National Product. FDI: Foreign Direct Investment. ROI: Return On Investment. BRIC: Brazil, Russia, India and China. WTO: World trade Organization. OECD: Organisation for Economic Co-operation and Development US$: United State Dollar CIA : Central Intelligence Agency ADF: Augmented Dickey-Fuller. OLS: Ordinary Least Square. VAR: Vector Autoregression Model VECM: Vector Error Correction Model. NLLS: Non-linear least squares AR: Auto Regressive Models H0: Null hypothesis H1: The alternative hypothesis I (0): Integrated of order 0 (stationary).I (1): Integrated of order 1 (stationary). TFP: Total Factor Productivity. CHAPTER 1 INTRODUCTION In last decades, we have seen new economic power emerge from low level economic development to relatively high level of economic growth. Among these emerging economies are Brazil, Russia, India and China (the BRIC). Over the past two decades, developing countries have posted high rates of e conomic growth. This has transformed them into emerging economies. There are many factors that acted as determinants of this high GDP growth rate of the erstwhile slow growing developing countries.Chinese economy is the largest of the emerging economies. Actually, China passed Japan and become the second largest economy in the world after United States of America. Subhash Chandra Jain (2006) defines emerging economy as nations with social or business activity in the process of rapid growth and industrialization. Based on data from Dow Jones classification (2010) there are around 35 emerging markets in the world with the economies of China and India considered to be the largest. China is leading the pack of emerging economies. Their economic growth has been propelled by many factors.The economic importance of China and its continued success in posting high economic growth rates makes it an ideal case for studying the determinants of economic growth in emerging economies. China has al l the characteristics of an emerging economy. It faces the many challenges that all the emerging economies continuously face and which act as the biggest barriers to their economic growth. It is in this spirit we have undertaken this study to determine whether there is evidence of relationship between some factors and economic growth in china.This dissertation presents the knowledge gap to be filled, research questions and objectives alongside the hypotheses of the study. Furthermore, it also shows to what extend the study is relevant for China, highlights the scope and the organization of the study. More specifically, the study aims to: – Review the literature on the theoretical foundation of growth: examining the different model of economic growth. – Review and describing some previous studies on some determinants and the relationship with economic growth. Main objectiveThe key objective of the research is to assess the impact of different factors that contributed to the unprecedented economic growth of China over the past few decades and determine whether those factors can be viewed as a determinant of economic growth. Organization of the study This study is organized as follows: Chapter two will give an overview of the Chinese economic and list of the major waves of reforms. The third chapter will be in two sections, the first section deals with the definition of growth and provides a review of the growth theories by illustrating patterns of some leading economists on the issue of growth.Among the models studied, we have those Harrod-Domar, Solow, and Mankin. The second section of chapter tree deals with selected reviews on some indicators that have likely slowed or promoted growth. In chapter four presents the data and describes the method of analysis adopted to estimate the determinants of growth in China. The presentation and interpretation of the results are presented in Chapter five. This is followed by Chapter six, the conclusion. CHAPT ER 2 OVERVIEW OF THE CHINESE ECONOMY According to central Intelligence agency (CIA), China is the second largest economy after the United States.The country has experienced a particularly strong economic growth since the 1980s. However, the population remains relatively poor: in purchasing power parity, an estimated per capita GDP IN 2010 TO 7,400 $ per capita. Led by the Communist Party since 1949, China has led since the late 1970s the power to call a â€Å"socialist market economy†. The public sector continues to hold an important place in economic life but private companies are playing an increasing role and the country is highly integrated into the global economic system. Since 2001, China is a member of the World Trade Organization.While agriculture still occupies much of the labor force (in 2010, 39. 5% of Chinese labor), it contributed only 9. 6% of GDP in 2010. Industry, however, takes a prominent place, employing about 27% of the working population and is the area's most prolific in China with a production of almost half of national GDP, According to the state administration of foreign exchanges, nearly 47% of GDP come from a huge surplus caused by industrial exports. This has allowed the country to build up foreign exchange reserves that reached approximately 2,450 officially billion in June 2010.According to some analysts, China will by 2020 be the second largest industrial and commercial in the world, just behind the United States, ahead of Japan and the richest states in Europe. Geopolitical characteristics of China China is located in eastern Asia, west of the East China Sea, Korea Bay, Yellow Sea, and South China Sea. The country is bordered by fourteen other nations. With a total area of about 9,596,960 square kilometers (3,705,407 square miles), the country is slightly smaller than the United States. China is administratively divided into twenty-three provinces, five autonomous (self-governing) regions, and four municipalities.Populati on Since the proclamation of the People's Republic, the country experienced three censuses of population and there were 582. 6 million people in 1953, 1 billion in 1982 and 1. 14 billion in 1990. According to China demographics web site (2001), in 2005, estimated population is 1. 31 billion people (about 21 % of the world population). Since the early 1970s, the Chinese authorities launched a policy of birth control, with the aim of stabilizing the population at 1. 2 billion people in 2000. Since the 1982 census, the rate of population growth has decreased dramatically.The Chinese population reached in July 2011, 1. 4 Billion. According to China's official statistics, the rate of growth increase of about 2 to 3% per year during the first phase of demographic transition (2. 6% in 1969), fell to 1. 1% per year between 1990 and 1995. It is estimated at 1. 02% for 1995-2000 and 0. 7% for the period 2002-2020. The birth rate fell from 45% o in 1953 to 21% o in 1990, reaching 13. 10% o in 2005. At the same time, the mortality rate was reduced from 22. 5% to 6. 90%. This low mortality is due to the current youth population. In 2005, 25. % of China's populations were under 15 years, 67. 6% between 15 and 65 and 7. 6% (2005), alone, more than 65 years. The male population is 51. 50%. Economic reforms in China The economic reform called â€Å"Socialism with Chinese characteristics† started in 1978 by reformists within the Communist Party of China led by Deng Xiaoping. 1978-1984 The reform has started with the improvement of the micro-economic management (agriculture and urban industry), these reforms were implanted by Deng Xiaoping. The main objective was to encourage farmers, business leaders and employees to increase economic productivity.Effective action has been taken, by allowing farmers to keep the land's output after paying a share to the state. This move increased agricultural production, increased the living standards of hundreds of millions of farmers (B randt 2008). In rural areas, the system of collective ownership has been replaced by the household responsibility. In cities, the main objective of the reform was to increase the autonomy of enterprises. To this end, a number of experiments to improve the management system were conducted. Some of them, after the initial demonstration of their success, have extended to the whole country.The creation of joint enterprises with foreign capital is now possible. Deng Xiaoping launched the reform of the so-called â€Å"open door†, opening China to the outside. Foreign investment is now desired, and their home is concentrated to a set of areas open to foreign trade. Five special economic zones are for foreign companies from 1979 (including the cities of Guangzhou and Shanghai as well as the zone of Shenzhen, near Hong Kong), and free zones. These special economic zones were experimental laboratories for China, allowing it to gradually open up to foreign trade techniques. 1984-1991The key point of the second period was the decentralization of state control also impended by Deng Xiaoping, leaving local provincial leaders to experiment with ways to increase economic growth and privatize the state sector (Brandt 2008). The reform has created favorable conditions for enterprise with a partial autonomy of management, which had the effect of creating a supply and demand of resources of goods and services. That have achieved positive results such as foreign trade and the financing system were introduced to create favorable conditions for enterprise reform. 1993- 2005After the death of Deng Xiaoping in 1997, the radical reforms were continued by the Prime Minister Zhu Ronji who came to power in 1998. He had a goal to integrate his country in the World trade Organization (WTO), hence the importance that preceded the entry into WTO. Zhu Ronji has introduced a new program, including the reform of state enterprises, privatization of public housing, the legitimation and expa nsion of the private sector, reform of relations with foreign investors, reducing by half the bureaucracy, the acceleration of the fight against corruption and the creation of a viable unemployment insurance scheme and pension.The reform of state enterprises is central to these policies whose characteristic is to be highly interdependent. Indeed, the Chinese government has helped them to escape their social welfare function, to observe the principles of the market, to increase the competitiveness by upgrading their management system After accession to the WTO, China has continued this wave of reforms to modernize its economy and metamorphosed with the rules of the WTO. CHAPTER 3 REVIEW OF LITERATURE Growth models Explanatory theories of growth are relatively recent in the history of economic thought.These theories have led to highlight the role of technical progress in growth. In the long run, only the technical progress leads to a more productive economy. However, each of these gro wth theories have weaknesses because they are able to fully explain the determinants of growth in any given economy. With this in mind that many economists have given their vision of growth. Basic Economic Growth Model The main factors of production under a basic economic growth model are the stock of capital and labor force. The output is a function of capital and labor. At national level, an aggregate production function can be represented by the formula:Y=F(K,L)†¦. (1) Where Y is output, K is capital and L is labor. Increased production (Y) depends on the increase in capital stock (K) through investment and depreciation, and increased labor supply (L) by the population growth. The amount of capital investment depends on savings and is calculated by multiplying the average savings rate in a country by domestic production. Labor supply is based on demographics. The Harrod-Domar model The Harrod-Domar model is the first formal economic model of growth. This model has opened the way for modern models of growth, particularly in the Solow model.The Harrod-Domar model is intended to extend over a long period of Keynes' General Theory, which covered only the short term. As the General Theory, the Harrod-Domar model aims to highlight the unstable nature of economic growth and the need for state intervention. In the Harrod-Domar model, there is no guarantee that an economy is on a stable growth path. This model was presented by Roy Forbes Harrod (1939) in the book â€Å"Toward a dynamic economics† and Evsey Domar in 1947 in an article entitled â€Å"Expansion and Employment† published in American Economic Review.The model focuses on two critical aspects of the growth process: saving and the efficiency with which capital is used in investment. This model can provide accurate short term predictions of growth and has been used extensively in developing countries to determine the â€Å"required† investment rate or â€Å"financing gap† to be covered in order to achieve a target growth rate. The Harrod-Domar model is simple with relatively small data requirements and the equation is easy to use. However, the model only remains in equilibrium with full employment of both labor force and capital tock causing inaccurate longer term economic predictions and fails to account for technological change and productivity gains considered essential for long-term growth and development. The equation in the Harrod-Domar model is: Y = K/v (2) Where v is a constant found by dividing capital (K) by investment (Y), v is the capital-output ratio. This ratio is primarily a measure of the productivity of capital or investment. Exogenous growth Solow model The Solow model is one of the main models of the theory of economic growth.Developed by Robert Solow (1956), it is a model of neoclassical economics. The model is based on a production function with two factors: labor and capital. Production thus results solely from the combination of s etting a certain amount of capital (means of production) and work (labor). The Solow model is based on the assumption that production function with the property of diminishing returns where each additional increment in capital per worker results in less output. It is also assumed that the factors of production are used effectively by all countries.By assuming that the population has a growth rate that Solow called â€Å"natural† (not influenced by the economy), the model derived three predictions: 1. Increase the amount of capital (i. e. investing) increases growth: with more capital, labor productivity increases (Called apparent). 2. Poor countries have a growth rate higher than rich countries. Indeed, they have accumulated less capital, and therefore they knew of diminishing returns lower. 3. Due to diminishing returns of inputs, economies will reach a point where any increase in factors of production no longer results in increased production. This corresponds to the steady state.Solow noted, however, that this third prediction is unrealistic: in fact, the savings never reach this stage because of technical progress which increases the productivity of factors. In other words, long-term growth comes from technological progress. However, this technological progress is exogenous to the model. The model implies â€Å"that the growth of income per capita cannot be sustained without continued technological progress. Whereas, Harrod-Domar model have identified capital accumulation as major source of development. Clearly the difference stems from different assumptions of the production function.In the Solow model, over time poor and rich countries incomes should converge. The Solow growth model takes the rate of saving; population growth and technological e. g, improved machinery, computers etc progresses are exogenous. There are two inputs capital and labor, which are paid their marginal products. By assuming a Cobb-Douglas production functional which is ge nerally used to represent the relationship of an output to inputs, the model is as follow: Y (t) = K (t) ? [A(t)L(t)] 1- ? (3) 0 < ? < 1 Y is output, K is capital, L is labor, and A is a parameter which might influence growth.The augmented Solow-MRW This model was introduced by Mankiw et al (1992), in their article â€Å"A Contribution to the Empiric of Economic Growth†, Mankiw, Romer, and Weil (1992), have augmented the standard Solow model by adding Human capital to the production function. Therefore, the inputs of the model would include a function of stocks of capital, labour, human capital and productivity. According to Cobb-Douglas production function in (4), production at time t in country i is given by Yi (t) = Ki (t) ? Hi (t) ? [Ai (t)Li (t)] 1- ? – ? (4) Where ? , ? ? [O,1] ? + ? ? [O,1],and t denotes time.This implies that the production function exhibits constant returns to scale in its three factors: physical capital (K), human capital (H), and productivit y-augmented labor (AL). Specifically, it is a Cobb-Douglas production function. All markets (both input and output markets) are assumed to be perfectly competitive. All firms are assumed to be identical. The economy can then be described by a representative agent. The growth accounting model The theoretical framework of the Solow growth model describes the sources of economic growth, and the consequences for long-run growth of changes in the economic environment and in economic policy.However, some economists have built up an alternative framework which examines economic growth in freer framework without necessarily being bound to adopt in advance the conclusions of our economic theories. This framework is called growth accounting which gives us a different perspective on the sources of economic growth. The model starts wilt a production function which shows that output Y is as a some particular time t as a function of the economy’s stock of capital Kt, its labour force Lt, a nd the economy’s total factor productivity At. The Cobb-Douglas form of the production function is: Y = F (A, K, L) (5)Since A captures not only efficiency gains but also the net effect of errors and omissions from economic data, the residual A is sometimes referred to as a measure of our ignorance about the growth process. The determinants of growth To study the impact of determinants on economic growth in China, it is necessary to present the theoretical foundations underlying the role of each determinant is expected to play in an economy, especially in the early stages of growth. We can distinguish several types of determinants for growth: natural resources, external environment, population, innovation, investment, knowledge, consistency of development.In this section, we will see a wide range of studies done to investigate the relationship between the different determinant and growth. Foreign direct investment According to the IMF and OECD definitions, direct investment r eflects the aim of obtaining a lasting interest by a resident entity of one economy (direct investor) in an enterprise that is resident in another economy (the direct investment enterprise). The â€Å"lasting interest† implies the existence of a long-term relationship between the direct investor and the direct investment enterprise and a significant degree of influence on the management of the latter.Direct investment involves both the initial transaction establishing the relationship between the investor and the enterprise and all subsequent capital transactions between them and among affiliated enterprises, both incorporated and unincorporated. It should be noted that capital transactions which do not give rise to any settlement, e. g. an interchange of shares. FDI is expected to increase employment, enhancing labor productivity, exports, lowers rental rate of capital and thus be a source of growth and productivity gains.It is also a vehicle for technology transfer, which i s crucial for take-off and recovery pathways to production to more high-tech. In contrast, it can also discourage competition and even corrupt the development path of a country. Numerous empirical studies have analyzed the impact of FDI on economic growth with divergent results. While some studies argue that FDI has a positive effects on economic growth in host countries, others against thinking that FDI is not a necessary condition or sufficient for growth. The following table provides some empirical studies on the impact of FDI on economic growth.Attention will be drawn to the latest studies. Table 1: Literature review on foreign direct investment Author| Sample Size andTime Period| EconometricMethod and Tests| Empirical Evidences| Basu & Guariglia(2007). | 119 developingcountries1970 – 1999. | GeneralizedMethods ofMoments (GMM)| FDI enhances both educational inequalities and economic growth in developing countries. However, itreduces the share of agriculture sector in GDP. | Johnson(2006). | 90 developed anddevelopingcountries1980 – 2002. | OLS regression| FDI inflows accelerate economic growth in developing countries. But it is not valid for developed countries. Hyun(2006). | 59 developingcountries1984 – 1995. | OLS regression| FDI has positive effect on economic growth but lagged FDI values have no positive effects on current economic growth. | Durham(2004). | 80 countries1979 – 1998. | Extreme BoundAnalysis(SensitivityAnalysis)| There is no direct positive effect of current and lagged values of FDI and portfolio investment on economicgrowth. | Carkovic & Levine(2002). | 72 developed anddevelopingcountries1960 – 1995. | OLS regression and GMM| FDI alone has no statistically significant affect on economic growth. | Obwona(2001)| Uganda1975 – 1991. 2 Stage LeastSquares| FDI has a positive effect on economic growth in Uganda. | Berthelemy & Demurger(2000). | 24 Chineseprovinces1985 – 1996. | GMM| FDI plays an important role in the economic growth of Chinese provinces. | Source: Endogenous Determination of FDI Growth and Economic Growth: The OECD Case (2008). The latest empirical literature has provided more-or-less consistent findings affirming a significant positive link between FDI and GDP. Trade Openness Another major determinant of growth is trades openness; it has been used in the empirical literature to investigate the relationship between openness and growth.First, the most basic measure of openness is the simple trade shares, which is exports plus imports divided by GDP. A large number of studies used trade shares in GDP and have provided that open economies increased their GDP faster than closed economies. This has led to the conclusion that trade openness has a positive relationship with Growth as reviewed in Dollar (1992), Sachs and Warner (1995), Edwards, (1998), Dollar and Kraay (2000). On the other hand, Levine and Renelt (1992); Rodriguez and Rodrik (1999); Vamvakidis (200 2) have criticized the robustness of these findings especially on methodological and measurement grounds.Openness affects economic growth through several channels such as exploitation of comparative advantage, technology transfer and diffusion of knowledge, increasing scale economies and exposure to competition. However, a recent study from Halit Yanikkaya (2002) in his paper â€Å"Trade openness and economic growth a cross-country empirical investigation†, have investigates the relationship between a wide variety of trade openness measures and growth. He used two types of openness measures. The first group was various measures of trade volumes (except population densities).Trade shares, export shares, and import shares in GDP were found to be significantly and positively correlated with growth. Another key finding in his study was that the growth effects of trade with developed countries are not considerably different from trade with developing countries. Furthermore, popula tion densities also positively affect growth through increasing trade volumes. Hence, the regression results for trade volumes provide substantial support for the hypothesis that trade promotes growth through channels such as technology transfers, scale economies. Human capitalThe role of Human capital for economic growth has been well documented in the economic literature which has long recognized that the quality of labor factor plays an essential role in the growth process. Indeed, the classical economist Adam Smith has highlighted the importance of the quality of the workforce in the competitiveness and economic growth in the long term. Adam Smith (1776) also showed that the wealth of individuals and nations depends on the skills levels of workers. The specialization of labor implies that there are different types of tasks that each individual does what he is alcified. The notion of â€Å"division of labor† also highlights the growth potential of the product linked to the improvement of the organization or production method. This improvement is made possible by dynamic entrepreneurs and skilled workers and the ability or qualification to perform specific tasks. The major recent contributions to the empirical, show that the growth of human capital was an important component of economic growth, therefore, it had a legitimate place in the aggregate production function Solow (1956) et Swan (1956), Mankiw, Romer & Weil(1 992).Furthermore, a large number of other studies have found evidence suggesting that educated population is key determinant of economic growth (see Barro, 1991; Mankiw et al, 1992; Barro and Sala-i-Marin, 1995; Brunetti et al, 1998, Hanushek and Kimko, 2000). Government size The size of the government can affect the economic growth through many channels, such as expenditure, the efficiency of resource allocation, taxation and the budget balance on several economic issues.The recent economic literature seems to point a negative relation ship between government size (General government final consumption expenditure) and economic growth (Guseh, 1997; Dalagamas, 2000). In the empirical study of Yesim (2005), relatively small sizes of government are detrimental to economic growth, while medium sized government affects it positively. According to Barro (1991), government size may have a negative impact on economic growth due to government inefficiencies, excess burden of taxation and distortion of the incentives systems.However, according to Ghali (1998), it may also have positive effects on growth due to beneficial externalities such as the development of a legal, administrative and economic infrastructure and interventions to offset market failures. Inflation Mankiw (2002) defined inflation as â€Å"a rise in the general level of prices of goods and services in an economy over a period of time†. Inflation reflects an erosion in the purchasing power of money. A chief measure of price inflation is the inflation r ate, the annualized percentage change in a general price index (normally the Consumer Price Index) over time.A number of empirical studies have been devoted to the link between economic growth and inflation. These studies have objective to determine the empirical relationship between growth and inflation, the following table provide some empirical studies on the impact of Inflation on economic growth. Attention will be drawn to the latest studies. Table 2: Literature review on inflation Author| Sample Size andTime Period| EconometricMethod and Tests| Empirical Evidences| Khan & Senhadji (2001). | 140 developed anddeveloping countriesduring the period 1960-98. Non-linear least squares (NLLS). | Inflation has a negative effect on growth. The threshold is lower for industrialized countries than it is for developing countries. | Atish & Phillips (1998). | 145 countries during the period 1960-96. | Multivariate regression analysis. | Negative relationshipbetween inflation and growth that is statistically significant. | Michael Sarel (1995)| 87 countries, during the period 1970 – 90. | OLS regression| A specific numerical target for policy: keep inflation below the structural break. | Joao Ricardo Faria and Francisco Galrao Carneiro (2001). Monthly inflation rateof Brazil and real output for the period 1980 -95. | The Blanchard and Quay (1989) decomposition. | The results indicated that in the short-run, there is a negative impact of inflation on output. | Robert J. Barro (1995). | 100 countries from 1960 to 1990| Based on an extended view of the neoclassical growth model. | The impact effects from an increase in average inflation by 10 percentage pointsper year are a reduction of the growth rate of real per capita GDP by 0. 2-0. 3% points per year. | Ghosh and phillips(1998). | 145 countries, over the 1960-96 period. Panel regression. | At very low ratesof inflation (around 2 -3 percent a year or lower), inflation and growth arepositively correlated. | From the table 2, we can conclude that most of the findings of the empirical studies have provided an evidence of a negative relationship between inflation and growth. However, Tobin (1972) suggests that inflation can have a positive relationship to economic growth. This is because inflation can cause individuals to substitute out of money and into interest earning assets, which leads to greater capital intensity and promotes economic growth.In other words, an increase in inflation can result in higher output; this effect is known as the Tobin effect. Infrastructure In a broad sense, the concept of infrastructure services closely associated with roads, highways, railways, ports and airports, telecommunications networks, the national distribution networks of gas, electricity and water, i. e. all investments that develop and facilitate the movement of people, goods and production (Barro, 1990). A large empirical literature to examine the effects of public infrastructure on the growth of na tions but also on local growth, especially scale of American States.Beyond the pioneering work of Ratner (1983) on the productive infrastructure, has been the work of Ashauer (1989) which showed a positive effect of public capital on output or productivity companies. Although recently confirmed by Munnell (1990), this proposal continues to generate various methodological criticisms mainly because many economists believe that the marginal productivity of infrastructure implied by the estimates is excessively high. Return on investment (Portfolio investment)The definition of portfolio investment is the acquisition of financial assets (which includes stock, bonds, deposits, and currencies) from one country in another country. In contrast to foreign direct investment, which is the acquisition of controlling interest in foreign firms and businesses, portfolio investment is foreign investment into the stock markets. Most economists consider foreign direct investment more useful than portf olio investment since this last one is generally regarded as temporal and can leave the foreign country at the first sign of troubleThe table below shows some empirical studies on the impact of portfolio investment on Economic Growth in Developing and Developed Economies and their findings. Table 3: Literature review on return on investment Author| Sample Size andTime Period| Empirical Evidences| Butkiewicz and Yanikkaya (2008). | 114 developed and developing countries over the period going from 1970 to 1997. | The study reveals that the countries which receive important volumes of direct investment flowing and portfolio investment will carry out a rapid growth. | Rodrik (1998) and Klein and Olivei (2008). 100 developed and developing countries 1975-89 and 1986-95. | The study reveals that country which does not impose a restriction on capital flows is lucky more to carry out a rapid growth than that closed. | Chambet and Gibson (2008). | 25 emerging markets from 1995 to 2004. | Por tfolio equity flows have positive effects on output growth. | The literature contains a large number of variables, other than the variables we have listed in this chapter, which might have a significant impact on economic growth. CHAPTER 4 DATA AND METHODOLOGYPresentation of the data and statistical analysis Measuring the impact of several aggregates on economic growth in China will be done using an econometric model estimated in the section methodology. It will also test the veracity of the assumptions made in the literature review. The general idea is that from the data on the various activities in China over a short and a long period, it is highlighted, through statistical and econometric techniques the relationship between economic performances achieved in the last decades and performance the overall economy in China.Before evaluating the regression results, the the variables will be used in the econometric model to determine the sources of economic growth in China will be expla ined. The variable used to measure economic performance is Gross Domestic Product (GDP) per capita. GDP per capita it represents all the wealth created in an economy during a year. It gives the best measure of activity level. Therefore, the dependent variables used in the model is GDP per capita (current US $). There are seven independent variables used in the model: * Foreign direct investment, net inflows (% of GDP). * Trade openness (% of GDP). School enrollment, tertiary (% gross). * General government final consumption expenditure (% of GDP). * Inflation, GDP deflator (annual %). * Portfolio investment, bonds (PPG + PNG) (NFL, current US$). The data used for this study is annual data from 1984 to 2009 and was obtained from the World Bank. This relatively long period has the advantage of lending itself to a range of econometric tests yielding robust results. It also allows us to show the effects of new reforms to the Chinese economy that have introduced a new management system t o help increase the productivity in the 80’s.The raw data table is presented in Annex 1 and the Log form in Annex 2, more detailed description of these data will be done in the next section 4. 2. Description of the variable The explanatory variables were selected from theory outlined in literature review. We grouped the variables that are likely to have a material effect on the endogenous variable. GDP per Capita: The World Bank national accounts data (2011)† define the gross domestic product as the sum of gross value added by all resident producers in the economy plus any product taxes and minus any subsidies not included in the value of the products†.GDP per capita is gross domestic product divided by midyear population. 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 84 86 88 90 92 94 96 98 00 02 04 06 08 Figure 1: China nominal GDP per capita Since the introduction of the economic reforms, the GDP has experienced significant growth since the 1980s, it has hit a record almost USD 4000 Trillion in the year 2009, providing further evidence of the growth potential of the Chinese market. This growth continued despite the many attempts by the central government to cool down the economy after pressure from the international community.Foreign Direct Investment Net Inflows (% of GDP) According to the World Bank, â€Å"foreign direct investment are the net inflows of investment to acquire a lasting management interest (10 percent or more of voting stock) in an enterprise operating in an economy other than that of the investor. It is the sum of equity capital, reinvestment of earnings, other long-term capital, and short-term capital as shown in the balance of payments† Figure 2: China- Foreign direct investment The Foreign direct investment; net inflows (% of GDP) in China was reported at 3. 42 in 2008.This series shows net inflows (new investment inflows less disinvestment) in the reporting economy from foreign investors, and is divided by GDP. China's economy is the second largest in the world after that of the United States. Trade openness 20 30 40 50 60 70 80 84 86 88 90 92 94 96 98 00 02 04 06 08 Figure 3: China -Trade openness. As can be seen in the graph, the trade openness in China is more open than it was 20 years ago, and that was due to the economic openness which increases in trade (as part of the reforms). The trade openness (% of GDP) in China was reported at 59. 0 in 2008, according to the World Bank† Merchandise trade as a share of GDP is the sum of merchandise exports and imports divided by the value of GDP, all in current U. S. dollars. China's economy is the second largest in the world after that of the United States†. School enrolment, tertiary 0 5 10 15 20 25 84 86 88 90 92 94 96 98 00 02 04 06 08 Figure 4: China- School enrolment, tertiary The school enrolment, tertiary, have known an import increase since the reform, Between 1996 and 2009, enrollment in higher education increased from approximate 5% to almost 25% of GDP per capita.Chinese universities form more and more engineers and scientists each year. This shows that China is on the road to a knowledge-based economy. The Gross enrolment ratio is the ratio of total enrolment, regardless of age, to the population of the age group that officially corresponds to the level of education shown. Tertiary education, whether or not to an advanced research qualification, normally requires, as a minimum condition of admission, the successful completion of education at the secondary level. General government final consumption expenditure 13. 0 13. 5 14. 0 14. 5 15. 0 15. 5 16. 0 84 86 88 90 92 94 96 8 00 02 04 06 08 Figure 5: China government final consumption expenditure. The General government final consumption expenditure (% of GDP) in China was reported at 13. 5 % in 2007, it has hit almost 16% in the year 2001. According to the World Bank. General government final consumption expenditure (formerly general government consumption) includes all government current expenditures for purchases of goods and services (including compensation of employees). It also includes most expenditure on national defense and security, but excludes government military expenditures that are part of government capital formation.Inflation Inflation rate refers to a general rise in prices measured against a standard level of purchasing power. The most well known measures of Inflation are the CPI which measures consumer prices, and the GDP deflator, which measures inflation in the whole of the domestic economy. -4 0 4 8 12 16 20 24 84 86 88 90 92 94 96 98 00 02 04 06 08 Figure 6: Inflation in China China’s average inflation rate of 2% over the past ten years has been unusually low for a developing country   The inflation rate in China was last reported at 5. 5 % in 2011 and its highest historical rate of 22% in 1994 and a low record of -2. 0 % in 1999. Portfolio investment, bonds -3,000,000,000 -2,000,000,000 -1 ,000,000,000 0 1,000,000,000 2,000,000,000 3,000,000,000 4,000,000,000 5,000,000,000 84 86 88 90 92 94 96 98 00 02 04 06 08 Figure 7: Portfolio investment The Portfolio investment; bonds (PPG + PNG) (NFL; US dollar) in China was reported at approximate -2 billion in 2008, its highest hit was reported almost 5 billion in the years 2005 According to the World Bank, bonds are securities issued with a fixed rate of interest for a period of more than one year.They include net flows through cross-border public and publicly guaranteed and private nonguaranteed bond issues. Data are in current U. S. dollars. Electric power consumption 0 400 800 1,200 1,600 2,000 2,400 2,800 84 86 88 90 92 94 96 98 00 02 04 06 08 Figure 8: Infrastructure China has been spending heavily in physical Infrastructure since the 90’s and that due to economic policy to improve the economic growth owing to its economic expansion. Figure 8 shows that the consumption of electricity has increased during the last 20 years. In 2009, it has hit a record of electric power consumption of 2400 kWh per capita.We measure infrastructure by looking at the Electric power consumption (kWh per capita) which measures the production of power plants and combined heat and power plants less transmission, distribution, and transformation losses and own use by heat and power plants. Descriptive Statistics The table below shows a summary statistic for the dataset used, the means differ significantly across the variable. The skewness coefficient is close to 0 for most values. The null hypothesis of the Jarque Bera normality test is that the residuals are normally distributed.The decision rule is to accept this hypothesis if the statistic of Jarque Bera (JB) is less than 5. 99. Here, the JB statistic is less than 5. 99 for all the series which means we cannot reject the null; there is no evidence of non-normally distributed residuals, except for Foreign direct investment which shows JB higher that 5. 99. Table 4: Descriptive statistic | ForeignDirectInvestmentNet inflows| GrowthDomesticProduct| Government Final Consumption | The level of human capital| Inflation| Infrastructure| Trade openness| Return on investment| Mean| 0. 020258| 0. 047137| -0. 0028| 0. 04396| -0. 01937| 0. 03529| 0. 1491| -0. 62059| Median| -0. 0042| 0. 041494| -0. 00224| 0. 037303| -0. 0022| 0. 033887| 0. 01207| 0. 108995| Maximum| 0. 374106| 0. 109831| 0. 037975| 0. 108951| 0. 650219| 0. 065986| 0. 108611| 18. 08911| Minimum| -0. 31887| -0. 04897| -0. 04678| -0. 01321| -0. 68278| 0. 00866| -0. 10326| -18. 5564| Std. Dev. | 0. 138935| 0. 038244| 0. 019386| 0. 038065| 0. 338516| 0. 014811| 0. 045317| 10. 35226| Skewness| 0. 67502| -0. 30828| -0. 19908| 0. 194607| -0. 13538| 0. 431179| -0. 24933| -0. 07282| Kurtosis| 5. 047| 3. 28519| 2. 723548| 1. 917252| 2. 50906| 2. 477846| 3. 399615| 2. 832023| Jarque-Bera| 6. 63353| 0. 480719| 0. 244745| 1. 378992| 0. 327435| 1. 058651| 0. 425367| 0. 051484| Probability| 0. 043645| 0. 786345| 0. 884819| 0. 501829| 0. 848982| 0. 589002| 0. 808412| 0. 974587| Sum| 0. 506443| 1. 17842| -0. 06988| 1. 098993| -0. 4842| 0. 882238| 0. 372743| -15. 5147| Sum Sq. Dev. | 0. 463268| 0. 035102| 0. 00902| 0. 034775| 2. 750233| 0. 005265| 0. 049286| 2572. 062| Observations| 25| 25| 25| 25| 25| 25| 25| 25| Methodology The objective of this study is to determine the impact of different factors that contributed to the unprecedented economic growth of China over the past few decades.In order to control for the problems of misspecification caused by the application of classical linear regression methods, recent developments in time series econometrics will be used such as the Error Correction Models and Johansen co-integration test. In this section, we explain the methodology that is the basis for estimating the appropriate model for the Chinese economy. The impact of different factors that contributed to the unprecedented economic growth of China over the past few decades and d etermine whether those factors can be viewed as a determinant of economic growth.Estimation of the general model The literature review has identified some models and we chose a variant of the model presented by Robert Solow (1957). Indeed, the standard growth accounting approach seems appropriate which is decomposed into stocks of capital, labor, human capital and productivity. The model that we suggest to use is based on a functional form of Cobb Douglas: GDP=F( FDI, OPEN, HUMCAP , GOVSIZE, INFL, ROI) †¦(5) The dependent variable is the growth rate of real gross domestic product per capita.All the independents variables are derived from the neoclassical theory of growth mentioned in the literature reviews in chapter tree. The empirical model used to examine the determinants of growth in China is shown in equation (6) below: ? LGDP=? + ? 1 ? LFDI + ? 2 ? LOPEN + ? 3 ? LHUMCAP + ? 5 ? LGOVSIZE + ? 7 ? LINFL + ? 4 ? LROI +?. †¦ (6) Where: The ? is the intercept and ? the err or term. The variables used for the construction of the models are: LGDP = Log of real gross domestic product per capita. LFDI = Log of foreign direct investment, net inflows (% of GDP). LOPEN = Log of trade openness (% of GDP).LHUMCAP = Log of the level of human capital (School enrolment, tertiary (% gross). LGOVSIZE = Log of general government final consumption expenditure (% of GDP). LINFL = Log of inflation, GDP deflator (annual %). LROI = Log of return on investment (long-term US interest rate): Portfolio investment, bonds). We have taken the logs of the variables in order to linearise the model. Furthermore the variables are tested for unit roots and are differenced accordingly to achieve stationarity. The results showed that most of the variables were I (1). The hypothesized relationships between GDP and its determinant:In the following table, we present the relationship between GDP and some of its determinant according to the literature reviews. Determinant of growth | Relat ion with Growth Domestic Product| Foreign direct investment| +| Trade openness| +| The level of human capital| +| General government final consumption| +/-| Inflation| -| Return on investment| +| CHAPTER 5 MODEL ESTIMATION AND FINDING This chapter presents the methods and estimation techniques used to determine the long-run and short-run growth for China. The empirical testing of this estimation will be done by following these tests: Determine whether the series are stationary or not by using the ADF test. * Estimating the OLS model with general equation. * Testing for Co integration using Engle and Granger technique and the Johansen cointegration test to see if the determinants of growth apply in the long run. * Estimating a VECM to examine the dynamics in the short-run and the adjustment of co-integration error term. 1. 1 Testing For Stationary using the Augmented Dickey Fuller Test: To avoid spurious regressions, it is necessary to study the characteristics of the series to see i f they are stationary or not.Equation tests for unit roots using the Simple Dickey-Fuller test. Yt=pYt-1 + ut (7) Yt will be stationary of the estimated value of p is less than 1. Yt will not be stationary of the estimated value of p is more or equal to 1. Therefore, we check for H0: p= 1 (Yt is not stationary) H1: p < 1 (Yt is stationary) A more convenient version of this test is to transform the model (by subtracting Yt-1 on both sides) and obtain the following: Yt=pYt-1 + ut (7) Where ? = p- 1. We can hence estimate equation (7) and test for ? as follows: H0: ? = 0 (Yt is not stationary) H1: ? lt; 0 (Yt is stationary) In equation (7) which is derived from equation (6), we are assuming that there are no constant and time trend (deterministic trend). There are 2 more versions of the Dickey-Fuller tests for unit roots shown in equations (8) and (9): In testing for unit roots, equation (8) includes a constant and equation (9) includes both a constant and a time trend. ?Yt=? 1 + ? Yt- 1 + ut †¦ (8) ?Yt=? 1 + ? 2t+ ? Yt-1 + ut †¦ (9) In equations (8) and (9), the DF test is still testing whether ? = 0. Generally, we look at the plot of the variable and decide which of equations to use.However, equations (7), (8) and (9) may suffer from autocorrelation and the test-statistics may be invalid. To solve the autocorrelation problem, we keep adding lags of the dependent variables (? Yt) until the problem disappears. The optimal number of lags are given by the SIC or AIC, but EViews will determine that automatically. This is called the Augmented Dickey Fuller (ADF) test. Using model (4), for example, the ADF model: ?Yt=? 1 + ? 2t+ ? Yt-1 + ? Yt-1 + ? Yt-2 + †¦ + ut†¦ (10) If the variables are found to be non-stationary, we transform them by differencing the variables to make them stationaryFor instance, let denote ? Yt = Dt . If Yt is not stationary, we take the first difference of Yt (? Yt ), and if we find that ? Yt is stationary, we say that Yt is integrated of order 1. However, if it’s not the case, we take the first difference of Dt (? Dt ), , If ? Dt is stationary, we say that Yt is integrated or order 2 or I(2). First all, before we undertake the test for stationary it’s useful to visualize the variables on a graph to see whether we need a constant or time trend or both in the ADF test. (See groupe figures 9. ). We have found that all the variables need a constant.Results of the stationarity test. The decision is made by comparing â€Å"ADF† to â€Å"critical value: If ADF> CV, then we accept the null hypothesis of non-stationarity of the variable and whether ADF [? 2(p)] one rejects the null hypothesis of no autocorrelation of order p. If LMA(p) < [? 2(p)] one cannot reject the null hypothesis of no autocorrelation of order p. Or equivalently, H0 = 0 there is no autocorrelation. H1 = different from 0, then the autocorrelation The statistic is distributed chi-squared, with p degrees of freedom. Acce pt H0 if the p-value of the Breusch-Godfrey statistic is greater than 0. 05.Table 9: Summary of the results from test for autocorrelation Models| Obs. * R-squared| Prob. Chi-Squared| Observation| Model 2| 0. 189117| | 0. 9098| | Autocorrelation is insignificant at the 5% level. | Model 3| 0. 267317| | 0. 8749| | Autocorrelation is insignificant at the 5% level. | Model 4| 0. 308434| | 0. 8571| | Autocorrelation is insignificant at the 5% level. | Model 5| 2. 285405| | 0. 3190| | Autocorrelation is insignifican

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QI Plan Part II--Quality Data Collection - Research Paper Example A large number of software packages are available in the market for recording daily hospital records. A tool as simple as excel spreadsheet can also be used to handle small amount of transactions for smaller organizations. Databases such as access can also be utilized. This would maintain a daily list of electronic records making it easy to sort, filter and backtrack any information. Health Management information systems (HMIS) can also be used to record and monitor data. This could contain supervisory data, clinic record data, drug stock-outs data, functioning of outreach services and health workers availability. The information could include internal activities, number of beds, daily admissions and discharges, number of causalities and duration of stay. Self administered surveys help in revealing characteristics of the entire population by considering large sample sizes. Many questions can be asked on a given topic and the response to them can be analyzed with flexibility. These surveys eliminate the limitations of self-administered surveys. Personal interviews are an alternative to surveys. The control of the interview is in the hands of the interviewer rather than respondent leading to better response and accuracy. The scope for confusion decreases significantly. Also the interviews are useful in cases where the interviewee is a senior executive or a leader of an organization and doesn’t have time to fill written survey (Data Collection Tools). Focus groups are used to obtain specific information which may not be possible using other methods. The focus group consists of people who exhibit a certain peculiar characteristic. For example, the satisfaction level of heart patient who went through bypass surgery in a hospital can be noted a few months after the surgery by forming their focus group. Focus groups contain 6-12 people generally. This ensures sufficient diversity in the group without compromising on attention to everyone in the group.

Literature Review - Marketing of luxury cars depending on affinity

- Marketing of luxury cars depending on affinity groups in America and The Middle East - Literature review Example In order to analyze the learning style, four vital tests have been used which are Myers-Briggs test, Belbin test, Honey & Mumford test and VARK analysis. From the analysis of Myers-Briggs test I have found that I possess the ENFJ learning style. The results of Belbin test depict that in team environment I act as plant, resource investigator and shaper. On the other hand, the Honey & Mumford test depict that I am activist and pragmatist learner. Finally outcome, of VARK analysis suggest that I prefer visual and kinaesthetic learning style. The assignment also describes about the transferrable skill I possess and how these skills can be used in my career. The discussion in Part B of the assignment elaborates on the current market trends witnessed in relation to the luxury car market around the world. Contextually, it argues that despite the rise in the demand of luxury cars across the globe, the American car market has witnessed significant fall in the production of luxury cars. Additionally, America is considered to be the home of diverse culture, owing to which, the luxury car market in the nation can be observed as significantly influenced by the Hispanic population. Hence, marketers of luxury cars have currently been involved in attracting reasonable Hispanic population towards their respective luxury car brands. On the other hand, luxury car markets in the Middle East have been flourishing at much greater speed due to the rise in the level of disposable income as well as due to the improvements in the roadway transportation facilities. The findings obtained through this study further reveals in this regard that the marketing str ategy related with luxury cars in America and the Middle East in years to come is quite likely to be strongly influenced by the affinity factor. Simultaneously, Customer Relationship Management (CRM) may also positively influence the marketing strategies of the luxury cars

Developing poise is a question of developing confidence in ones personality Essay Example for Free

Developing poise is a question of developing confidence in ones personality Essay Developing poise is a question of developing confidence in ones personality. Look at all the people who lack this confidence. The noisy are unsure of themselves and trying to attract attention. The awkward are over-anxious, worrying about the impression they are making. The clumsy are self-conscious, scared of disapproval. Some people lack poise because it requires ability to wait for people and things to come to you, rather than straining after them. This action demands a degree of self-confidence which they have not managed to acquire. The first essential to poise is a sense of well-being. It is difficult to be poised if you are suffering from poor health; so many things are apt to upset you. One should try to be as fit as possible by living and eating wisely, having sufficient rest, and by getting proper treatment when something is wrong. A second necessary part of the sense of well-being is scrupulous cleanliness and freshness with regard to oneself and ones person. Allied to this is appearance. You must look and feel that you look your best. It is not necessary to spend a lot of money on clothes, but it is vital that you should think you look smart, and that your clothes should be so comfortable that you can forget about them. Now behavior comes in, including the way we walk and carry ourselves, sit down, stand up, and move around. The body should be upright and well-balanced, head up, shoulders back, tail tucked in. We should aim to look alert and interested, to walk easily from the hips, neither mincing along in short tight little steps nor striding. We should study the way we sit down and rise to our feet. We should place a chair in front of a long mirror and see how well- or how badly- we do it, asking a sympathetic friend or a family member to criticize. It is mostly a matter of how we carry ourselves. We should watch the way we open and close doors and cupboards. We should learn to sit well back on a chair instead of perching on its edge. By far the most important part of good manners is consideration for others- putting people at their ease, making them welcome, seeing that they are comfortable and have what they need, stepping into the background to give them a chance to shine. We should always practice unfailing courtesy. There is also a matter of the way we talk. A pleasant speaking voice gives its owner tremendous self-confidence. Every now and then, as a check, we should listen to ourselves talking. Nervousness may be making us gabble, or on the other hand, slowing us down until we seem pompous. Or we may be pitching our voices too high or too low. Because poise is primarily a question of self-confidence, we must have a sense of personal worth- the feeling that we are wanted and have something to give the world. A feeling that we are unwanted and that the world would be better off without us gives rise to a reaction to avoid people or to become aggressive towards them. Financial insecurity, job worries, dull routine work that seems important, work that others take for granted, or anything that encourages us to believe that we are of no account destroys our sense of personal worth and with it our self-confidence. It is hard to feel at ease with people when we are resenting being made to feel inferior. There is also an unpleasant sensation of being out of things and not belonging which, in our minds at least, sets us apart from other people and causes us to be anxious about the impression we are making. Students and adolescents generally are difficult to reach and to get at, as we say, because they are so uncertain of themselves and their future. They are gauche and touchy because they feel insecure. To develop poise we have to find value in ourselves and meaning to life. In plain words, we have to do a job that strikes us as being worthwhile and useful, and acquire the skill which this implies. To achieve real poise, one must be careful about people. They are remarkable for their unpredictability, which means in terms of practical living that it is unwise to depend on them too much. Like us, they are swayed by their moods and feelings. If we often surprise and horrify ourselves, why should we be hurt or angry when others react in ways equally surprising? We have to learn to be self-sufficient in the sense of being able to stand aloof, relying on ourselves when necessary for our happiness. This is not difficult if we have a sense of personal worth and satisfying interests. We should avoid becoming emotionally involved in other peoples quarrels, prejudices, dislikes, and arguments. If we are forced to take part, we may try to be a calming influence.

Studying The History Of Workflow Management Systems Information Technology Essay

Studying The History Of Workflow Management Systems Information Technology Essay 1. Introduction In this seminar, I would like to introduce the history and definition of workflow management system. In that, we can classified the workflow into several. Then, standard and types of workflows. Beside that, I also introduce the advantages of using workflow management system. Other than that, I also introduced one of the collaborative system which to assist in workflow management system, that is document management system. I will briefly discuss the history, definition and advantages of systems and usage of the system to help in workflows systems and related to document management. In groupware. I will introduced the history and definition of it. Furthermore, I will discuss about the area and levels of groupware with its advantages. I will linked and identified how do they work together to deliver a well manage workflow from different level of lecturer and staff in developed the new course and its details. 2. Workflow management system 2.1 Introduction In 1980 ago, most of the companies and customers were seen an crisis and obstacle. It was because of the structure of organization were very inflexible and slow to response the new requirement from the markets and customers. As the market become international, the competition between organizational increased rapidly. To overcome and increased the power of competition, organization need to changes their organization structure to faced the new requirement from market. Because of these challenges, computer sciences industry have to created and develop a new information communication technology to suited the new requirement of markets. So the workflow technologies was developed in early 1990 was an leading to the new trend of computer industry. Workflow management systems is comes from the word workflow, which means that is sequence of jobs/ operation to distribute to a person or a groups of people on a simple or complex works. It may also delegate a small portion of big task to distribute , work split to others people for controlling purposes. The most common described the flow refer to the document that is being transferred from one to another. For more detailed, workflow is an activity that can described the information flow, process of work and organizational structure such as functions and hierarchies into a work process. (Wikipedia, 2010) 2.2 History In 1990s, workflow management system was created based on workflow process and business rules. The main purpose of the creation is to resolved the paper-based task with electronic process. At the end of 1990s, the workflow management system was created with additional function like modelling tools, business rules process and others. But in year 2005, Microsoft was created windows workflow foundation to replaced the original workflow with others functionality like BPM (Business Process Management). (Wikipedia,2010) 2.3 Definition In workflow management system, they are different module to run the business process. For example, document images processing, office system and transaction processing was build during these trend. From the beginning, the system is more concerned about storing, retrieving and tracking the data and information. Later, the system will more emphasized on office system which e-mails will become the core module to communicated for workflow system to exchange files and documents among them. In workflow management, there can divided into four generation (see figure 1). In first generation of workflow management system, the system is more focusing on e-mails exchange and document management. Then in next generation, the workflow process are tailorable through coding. Third generation, the systems have the standard architecture then can fully supported with third party tools. In fourth generation, the systems can fully supported with e-mail exchange, workflow process management etc. WORKFLOW1.JPG (61753 Byte) Workflow management systems is a computer system that manage multiple tasks in an organisation to produce output to others. It allow us to define workflows for work of processes or types of jobs. Example, in a manufacturing company, the product of design document may from designer then pass to technical people to production engineer. In every stage of workflow, every individual is responsible for their specific task and jobs. When the task is completed, the workflow management system will make sure that people that in charge of the task are notified and the information they need to process in their own stages. Its also help to eliminate redundant jobs and others uncompleted task are followed up. This called dependencies, means the system required the dependencies of every completion tasks. Others function of workflow management systems is using to replacing paper document transfer (paperless). (Kà ¤mpf and Großmann. 2006). 2.3.1 Classification of workflow management system There are 3 classification types of workflow management system, that is production workflow, ad hoc workflow and administrative systems. Production workflow Production workflow are the predefined job, tasks to be process or need additional steps. For as example, in the claims of car accidents, they will involve several basic steps (identifying the parties involved, log the police report and confirm with the agent of policy coverage) and additional steps (handling bodily injury, compensate of property, repairing of the car). Production workflow dedicate the process and maintain the productivity. Ad workflows Ad hoc workflows are through discussions and created new thing for each workflow. Ad workflows always use e-mail to carry out the work. In example of groupware, everyone need to collaborate to create or work on new design on a new product. Administrative workflow Administrative workflow are combination of ad hoc and production workflows. Means that the flow is pre-defined (e.g. approval of expense report) and they will use e-mail to communicate with others. This work is normally used by administration for example of travel claims. (Kà ¤mpf and Großmann. 2006). 2.3.2 Standardization The following diagram will specified the standard for Workflow Management Coalition(WIMC) which included characteristics, functions and interfaces. WORKFLOW2.JPG (48021 Byte) by Shegalov, Gillmann, and Weikum (2001) Refer to figure 2, the standardization of workflow are exists in three level. The first levels is how the workflow fit all the process together. Second level is abstract specification means that what the data of function needed. Third level is the details of how the function implemented using the tools. Refer to figure 2, there are five Application programming interface (API) surround with workflow engine. The API is functional as interact and communicate between clients and workflow engine. Process definition: This is the process which will involved the workflow and allocated the resources example: system and people to execute the jobs. Client interface: This interface which the workflows will involved by software. Involved applications: This interface involved the workflow software like example: document management system, email system and document imaging system. External workflow services: This interface is deal with external workflow of the company or others companies. Administration and monitoring : This interface is functional as admin and monitor of all the workflow being executed. These five interface become the minimum standards for workflow system. It is very important to having system architecture to cope with existing environment and implemented it with others business related companies. (Kà ¤mpf and Großmann. 2006). 2.3.3 Types of workflows There are two types of workflows. Sequential workflow Sequential workflow style is execute set of process and activities sequentially or one followed by another. There are no return to previous flow if required. For example figure 3. http://i.msdn.microsoft.com/Ee231606.SP_Sequential(en-us,VS.100).png Figure 3 State machine workflow State machine workflow is combine of state, actions and others. These workflow usually complex and may return to previous flow if required. For example figure 4. State Machine Workflow Figure 4 (Msdn, 2010). 2.4 Advantages of Workflow Management System 2.4.1 Improve productivity There are many advantages of using the workflow management system. One of the advantages is it can help the organization to improve their productivity. Before it, the workers will spend a lot of times on doing the manual tasks for example to approve the clients changes on their details on paper works. This will waste lot of man power, times, resources and money on this dummy works. Furthermore, it will slow down the organization performance and risk the development of it. With the system, every things can doing on split of eyes. When there are changes of the details, staffs can send e-mails to their supervisor to approve the changes rather than paper work. 2.4.2 Visibility It also important to let manager having visibility on the business workflow. For manager, it is responsible for them to understand the whole workflow of department. If there are any happen with business critical processes, he will identified it and take appropriate steps to overcome it. For example, in the shipment department, there are lot of wrong shipment to destination. Manager may easily identified which flow are causes the mistakes. 2.4.3 Faster change to business reaction Besides that, it allows the organization to having faster business reaction to change. In the organization, top management may change organization business flows or business process reengineering to react to market changes. For manager, they may quickly change it through process modification on workflow system. Example, if customers pay the bills for abnormal transaction by using credit card, operator of credit card company may call the card owner to verified the transaction to avoid fraud. 2.4.4 Accountability For manger, it can improve accountability skills. Manager have overview and understanding of process, it can help him to allocate resources and man power to which processes are more necessary. This may reduce wasteful of resources on focus to other major process. Example, manager may identify administration department need lesser staffs compare to accounting department. So, he can switch some staffs to accounting department to improved productivity rather waste resources or terminate the staffs. 3. Electronic document management system 3.1 History From year 1980s, there are lot of IT people began to develop a system to manage the paper-based document and images of a company to reduce the yearly huge expenses on paper. Later, they created the first system called electronic document management (EDM) system to managed those document that created by computers. It also known as document imaging systems, because the main function were capture, storage, and retrieve the file. It also help the organization to capture faxes and save document as images. (Wikipedia. 2010). 3.2 Definition Electronic document management system is a kind of computer software to organized and manage electronic document. For example, word processing documents, image, spreadsheets and others. The document which users can change and store the document in electronic form or images for the purpose of retrieving, sharing, distributing, version control, workflow management. Document management system will require scanner to convert the document to digital form for storing. (Wikipedia. 2010). 3.3 Function of electronic document management system In electronic document management system, there are few major function to manage the document: Data recording and storage both in document and out document are required to tagged with date and time of last accessed. Capturing documents when scanner scan the images of hard copy document into electronic formats, it will stored it in database for easy storage and flexible retrieving the document. Document retrieval the system make the document retrieve more easily by clicking some button rather than search it in cabinet. Create indexes system can help to organize document by create indexes to uniquely identified each group of document and save time for searching. Version control system able to keep track multiple version of same document to manage and store multiple version of data to system. (Marc, B. 2010). (Bestpricecomputers. 2010). 3.3 Advantages of Electronic Document Management System 3.3.1 Reduced storage spaces The storage document in an organization always is an big issues for them. If the organization which exist more than 10 years, it will be a huge amount of documentary in organization. By scanning those documents and store in DMS system can reduce a large amount of paper storage. Beside of that, it also help the organization to reduce cost of storage to store documents. 3.3.2 Prevent lost files In an organization, it is very common that a document can lost it easily without having a well organized storage. Lost of documents is an loss for an organization and need time to replace it. Furthermore, hardcopy of records which retrieved from storage, may lead to loss because others may getting the same file. With DMS, the image of the document will store in the server and can view by others without losing and damaged. 3.3.3 Improved security DMS can provide a better security, flexible to access on document level based on the level of groups and people. Documents that store in DMS are required authentication and access code to view and modify the documents, it also eliminate the unauthorized people to access confidential documents. Example, in an organization, staffs are need password and username to access groups of document instead of easily get the document stores in cabinet without any authorization checking. Furthermore, DMS can provide audit function of who, when and which documents being access by staffs. 3.3.4 Controlled and improved distribution Documents imaging are easily distribute to colleagues and staffs by e-mail and web instead of photocopy to share. This provide cost saving by reducing organizations paper document for example printing and postage which with hard copy documents. 3.3.5 Flexible retrieval Keeping the softcopy version of documents in DMS system is better against hardcopy document. It is because that, it more fast to retrieve the records compare to searching in cabinet to get the records. Staffs can spend lesser time to get the records in their own table without leaving. 3.3.6 Version control Documents are stored in network can be changed by users without changing history. Document management system require documents to be checked out first for change and check in to save changes into database. It can view the entire history of documents of who and when to modified the documents. 3.3.7 Reduced costs When implemented the system, we can reduced a lot of unnecessary paper works cost on it especially for TAR college with huge amount of students intake and lot of lecturers. (Content Manager. 2008). 3.3 Critical evaluation In TAR college, it is emergent need for the document management system (DMS). The reason is to reduced the documents spaces. For TAR college which are big education institute with approximated 6000 people intake every year, there must be a huge amount of studentss details and documents of it. The space need to stored, managed and categories these students will be a headache problems for staffs. Beside that, lecturer may have document sharing as discussion on new course development. Loss of documents will be an norms for bad practices on document management. In TAR college, with large amount of document and lecturer works. It will easily loss their document if impropriate managed and storing due to . Those information are valuable to them and time consuming to replace it. Example, record of students or evaluation on course developed. Beside that, with DMS, the documents and information are securely been stored in it. Someone is needed password to access certain documents. This to prevent unauthorized staff and lecturer to access some highly confidential and students details or financial documents to protect privacy and prevent disclosure those information to third party. Example, normal staffs may not easily get the financial report from finance department. The results from discussion of course developed is essential to keep its version control. This is to make sure the workflow of it is well managed under DMS. Without it, it is easily mess up with older version results and produced inaccurate discussion and results based on old version discussion. Other than that, with DMS, staff and lecturer may easily to retrieve the information by clicking some button rather than physically go to other department to retrieve it from cabinet. Example, lecturer reference some course details from course development department. In Extending Document Management Systems with User-Specific ActiveProperties journal. The author stated out 4 problems of traditional document management system. That is file documents, manage document, locate documents and share documents. -For file documents: it reflects that particular documents are relevant to multiple activities and department. Example, travel plans are relate to budget decision and scheduling with the department of accounting and HR. -For manage file: the administrative function of documents according to demands of user needs. -For locate documents: documents may filed to one criterion but retrieved according to another, because cannot define the cross-cutting set of categorization to group of documents. -For share documents: organization may not know that particular document is relevant to people or need of their groups of people. Groupware History Groupware was introduced by a people Richman and Slovak in 1980. They say that Like an electronic sinew that binds teams together, the new  groupware  aims to place the computer squarely in the middle of communications among managers, technicians, and anyone else who interacts in groups, revolutionizing the way they work.(8) In 1990s, the company who used the groupware are Boeing and IBM. They use it as meeting tools to control the projects. Then lotus notes act as major software of groupware. It allow group of people to work together in internet in early stage. Slowly, groupware was fully integrate in web site and come out Web 2.0 for the purpose of host a corporate network. The functionalities include document sharing, instant messaging, web conferencing with others. (Wikipedia. 2009) Definition Groupware also called as collaborative software. The purpose of groupware is to change the documents and other materials to be shared effectively in team collaboration. Before that, we have to understand the human interaction is a must to create software to meet their needs. There are three ways of human interact: conversations, transactions and collaborations. Conversational interactions: It is the information sharing between two or more people, the purpose is to build the relationship among them. Communication technology are instant messaging, E-mail and others. Transactional interaction: It is to exchange transaction entities, means to alter relationship between participants. One participant exchange money for services and products to become a customer. It effectively in transaction systems for manage records for persistent change. Collaborative interaction: participants relationship is to alter a collaborative entity. Example, to achieve a common goal. So, true collaboration technology is to bring many people to achieve a common output. To get the many effort into a managed environment is collaboration technology. We can divided groupware into 4 area: Knowledge management tools Knowledge creation tools Information sharing tools Collaborative project management tools (Wikipedia. 2009) Collaborative project management Collaborative project management tools (CPMT) is described all detailed of collaboration and management of project and its related knowledge areas. Beside that, it also known as business related goals which used for project management. Example of collaborative project management tools: Collaborative project management tools Instant messaging Telephony Videoconferencing Web conferencing E-mail Web publishing Revision control Document versioning Document sharing Levels of groupware Groupware can be divided in 3 categories based on level of collaboration: communication tools, conferencing tools and collaborative tools. Communication: It is unstructured way to exchange information. For example, instant message discussion and phone chatting. Conferencing: Interactive work toward a goal. For example brainstorming from group of people and also voting. Collaborative: complex interdependent work toward a goal. Everyone was contribute their effort and work differently on achieving a goal. Example, everyone in an organization from different department are work hard in their own position to contribute their effort in organization to generate more profits. (Wikipedia. 2009) Communication tools Communication tools is use to communicate with people and sharing information by messages or documents. Example: E-mail Revision control Web publishing (Wikipedia. 2009) Conferencing tools Conferencing tools is use to sharing information in more interesting and responsive way. Example: Forums an internet discussion spaces to manage messages from other people. Online chat a real-time message convertion and discussion. Example MSN. Videoconferencing networked PCs conference with video and audio. Instant messaging. (Wikipedia. 2009) Collaborative tools Collaborative tools is use to manage group activities. Example Workflow systems management of tasks and documents in business process. Project management system it is a system to schedule and tasks allocated to people the steps in projects to be completed. Knowledge management system it is a system for an organization to create, store and distribute good practices and experience. (Wikipedia. 2009) Advantages of groupware Increase efficiency Groupware is to provide a centralized access point to access information. Group members have to access their related information for their tasks in their group. It can remove redundant work, required less time to search data, and spend more time in tasks. (Web conferencing zone. 2005). Define and enforce process With groupware, we can know how the information is flows. All the documentation are kept on the person who make changes. This will help group members to ensure them to perform their jobs and satisfied with their contribution to the projects. (Web conferencing zone. 2005). Provide structure Thought groupware, it can show the group members of how the tasks been allocated, what the goals of projects, expectation from them. Group members are know that their task and roles of projects. Other than that is to provide project management with scheduling and tracking facilities. (Web conferencing zone. 2005). Critical evaluation Conclusion In conclusion, workflow management system can help us to manage the task flow to be more easily and transparent. It can identified the business process, the task allocated to particular members and goal of the projects. Beside of that, it need electronic document management system to control the task and documentation of members to work more effectively and efficiency. Lastly, groupware will help group members to communicate more easily and effectively on discussion and reporting the methods to carry their tasks. In conclusion, I will combined these technology to create a system to let lecturer can have a better environment on discuss and developed a new course structure.