Augmented Dickey-Fuller (ADF) and Phillips-Perron (PP) Results

Augmented Dickey-Fuller (ADF) and Phillips-Perron (PP) Results While analyzing time series data, it is important to check the order of integration of the variables. Augmented Dickey-Fuller (ADF) and Phillips-Perron (PP) unit root test are used at level form and first difference of each series. The results of the unit root test are reported in Table 5.9 taking into consideration of the constant-trend variables and without the constant-trend variables. In the ADF test, the lag length is included to solve the problem of autocorrelation and to enhance the robustness of the result. The ADF t-statistics for the series without the constant and the trend term are all statistically insignificant to reject the null hypothesis of unit root. This shows that the series are non-stationary in their original form and they contain a unit root process. For the series with the trend and constant term, all the variables are non-stationary except the capital expenditure whose ADF t-statistics is significant and it is I(0). When the ADF test is carried out at the fi rst difference of each variable, the null hypothesis is rejected for both the series with the constant and rend term and without the constant and trend term. This is presented in fourth and fifth column of Table 5.9 and it shows that the variables are integrated of order 1. The results are consistent with theory as most of the macroeconomic time series data are expected to contain unit root and thus are integrated of order one I(1). ADF critical values without constant and trend:1%: -3.750; 5%: -3.000; 10%: -2.630 ADF critical values with constant and trend:1%: -4.380; 5%: -3.600; 10%: -3.240 Long run Equation The long run equation can now be estimated with the assumption that no variable contains more than one unit root and the first difference of each variable is stationary. With the aim of analyzing the effect of aid on current, capital and loan repayment, this study employ annual time series data from 1985 to 2008. Table 5.10 presents the result of the long run equation. The reg ression result reported in Table 5.9 shows that the relationship between aid and current and capital expenditures is negative and statistically insignificant. An interesting result in Table 5.9 is the positive coefficient of aid in principal repayment. This shows that aid is being employed to finance loan repayment. Urban population has elasticity coefficient of 7.58, 4.28 and 1.44 in current, capital and loan repayment respectively. This shows that urban population has a positive effect on government expenditure while population has negative effect on government expenditure with negative coefficients. R2 value is greater than 0.5 in all the three cases indicating that Aid, population , urban population and lagged GDP accounts to 71% ,50 % and 52% variation in current, capital and loan repayment expenditure respectively. Another desirable property of econometric result is the value of the Durbin Watson statistics which is close to 2 and represent the absence of serial correlation in the error term. Testing for co-integration An important property of I (1) variables is that they can be linear combinations of I (0) variables. If this is so, then these variables are said to be co-integrated (Maddala et al 1999). To test the presence of co-integration, the null hypothesis of unit root in the residuals is tested against the alternative hypothesis that there is co-integration between the variables.

ISO Standards and Excellence - reflection ( CLO 3 ) Essay

ISO Standards and Excellence - reflection ( CLO 3 ) - Essay Example This certification is so objective (making it more credible and reliable) that ISO itself does not do the certification but a third party certification body that cannot be certified by ISO. This removes conflict of interest and undue influence. This certification process involves an audit in evaluating the company’s standards vis-Ã  -vis audit criterial established. This is a continuous process to ensure that quality and improvement is maintained. The benefits of having ISO certified are many. Having quality as a standard obviously meets if not exceed customer’s requirements and this means increased customer satisfaction leading to more business and more profit for the company and able to articulate its processes. Getting an ISO certification is not easy when I did a review on the audit process. But considering the benefits of the certification to the company and its long-term viability as a business organization, ISO is no longer just a quality certificate that a company may opt but an imperative in today’s very competitive environment because it wears the badge of credibility and

Report on the company Essay Example | Topics and Well Written Essays - 2000 words

Report on the company - Essay Example Coca-Cola is a 128 year old multinational company that has its presence in over 200 countries, and produces over 3500 products (Lim and Wong, 2014). It does not take a single hand to accomplish that amount of success within those numbers of years in all these countries that include USA, Britain, Kenya and many others. Its success depends on the several suppliers that it depends on to provide raw materials and valuable resources. . These provide the system with materials such as ingredients, packaging and machinery, as well as goods and services (The Coca-Cola Company 2014). Coca-Cola products range from soft drinks to drinking water, such as coke, Fanta, sprite, Dasani, Aquapure among others. This diversity in production calls for a long list of supply products to manufacture these include syrups and concentrates, sweeteners; juices; mineral waters; finished product; carbon dioxide; fuel; PET (plastic) preforms; glass, aluminum, and plastic bottles; aluminum and steel cans; pouches; closures; post-mix (fountain syrup) packaging; and other packaging materials (Wikinvest 2014). The supply chain of Coca-Cola Company involves all the companies that come into contact with the company’s products. This includes every company involved in making parts for the product, putting it together, delivering and finally selling. In other words it involves the suppliers, Manufacturers and retailers (Investopedia 2014). Due to the fact that the whole process begins with the supplier, the whole process cannot stand without the suppliers. This makes them a very key element. To understand the impact of suppliers to the Coca-Cola Company, their roles must be laid out clearly. One of the roles of the suppliers is acquisition. They provide the company with equipment, spare parts and raw materials. This enables the company to service and repair machinery, and produce end products. During the process of acquisition, they keep in contact with clients to make