The Doing Business Report (DB) is a study elaborated by the World Bank Group since 2003 every year that is aimed to measure the costs to firms of business regulations in 189 countries in 2012.The study has become one of the flagship knowledge products of the World Bank Group in the field of Private Sector development, and is claimed to have motivated the design of several regulatory reforms in developing Countries. The study presents every year a detailed analysis of costs, requirements and procedures. A specific type of Private Firm is subject in all countries, and then, creates rankings for every country. The study is also backed up by broad communication efforts, and by creating rankings, the study spotlights countries and leaders that are promoting reforms.
Table of Contents
INTRODUCTION
1.1 Doing Business
1.2 Ease of doing business index
1.3 Starting a Business Methodology
1.4 Dealing with Construction Permits Methodology
1.5 Getting Electricity Methodology
1.6 Registering Property Methodology
1.7 Getting Credit Methodology
1.8 Protecting Investors Methodology
1.9 Paying Taxes Methodology
1.10 Trading Across Borders Methodology
1.11 Enforcing Contracts Methodology
1.12 Resolving Insolvency Methodology
1.13 OBJECTIVES
1.14 SOURCE OF DATA
1.15 VARIABLE DESCRIPTION
1.16 PROCEDURES
METHODOLOGY
2.1 Factor Analysis
2.1.1 Introduction
2.1.2 Orthogonal Transformation
2.1.3 Assumption:
2.1.4 Parameter Reduction
2.1.5 Trivial case
2.1.6 Principal Component (Principal Factor) Method
2.1.7 Factor Rotation
2.1.8 Criterion for choosing the orthogonal matrix [Varimax criterion]
2.1.9 Factor Scores
2.2 MULTIPLE LINEAR REGRESSIONS
2.2.1 Data and Sample regression model
2.2.2 Assumptions:
2.2.3 Estimation of the regression parameters
2.2.4 Properties of LSE’s
2.2.5 Prediction and Residuals
2.2.6 Decomposition of the overall variability in the data
2.2.7 Estimation of σ2
2.2.8 Hypothesis Testing in multiple linear regressions
2.2.9 Coefficient of determination (R2) and Adjusted R2
2.2.10 Multicollinearity
2.2.11 Multicollinearity Diagnostics
2.2.12 Remedial Measures for Multicollinearity
ANALYSIS & OUTPUT
3.1 Factor Analysis:
3.2 Multiple Linear Regressions:
3.3 Variance Inflation Factors
3.4 Rank Method
CHAPTER 4
CONCLUSIONS
4.1 Conclusions
CHAPTER 5
Research Objectives and Topics
The primary objective of this study is to predict which country is better for doing business by reducing the dimensionality of a large dataset using multivariate statistical techniques.
- Factor analysis for variable dimension reduction
- Multiple linear regression modeling
- Ranking countries based on factor scores
- Predictive modeling for ease of doing business
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2.1 Factor Analysis
Factor analysis is a statistical method used to describe variability among observed, correlated variables in terms of a potentially lower number of unobserved variables called factors. Factor analysis searches for such joint variations in response to unobserved latent variables. The observed variables are modeled as linear combinations of the potential factors, plus "error" terms. The information gained about the interdependencies between observed variables can be used later to reduce the set of variables in a dataset. Factor analysis originated in psychometrics, and is used in behavioral sciences, social sciences, marketing, product management, operations research, and other applied sciences that deal with large quantities of data.
Factor analysis is related to principal component analysis (PCA), but the two are not identical. Latent variable models, including factor analysis, use regression modeling techniques to test hypotheses producing error terms, while PCA is a descriptive statistical technique.
The essential purpose of factor Analysis is to describe the covariance relationship among ‘many’ variables in terms of a ‘few’ underlying, but unobservable, random quantities called factors. The motivation is the following argument:
Suppose variables can be grouped by their correlation such that variable within a group are highly correlated among themselves but have relatively low correlations with variables in a different group. It is conceivable that each group of variables represents a single ‘construct ‘ or ‘factor’ which is responsible for the correlation.
Summary of Chapters
INTRODUCTION: Provides an overview of the Doing Business Report, the methodology for various sub-indices, and details on data sources and variables.
METHODOLOGY: Outlines the statistical techniques applied, specifically Factor Analysis and Multiple Linear Regression, to handle the business data.
ANALYSIS & OUTPUT: Presents the results of the factor analysis, regression models, and the final country rankings based on business data.
CONCLUSIONS: Summarizes the findings of the statistical analysis, confirming the model's validity and the importance of the identified factors.
Keywords
Factor Analysis, Multiple Linear Regression, Ease of Doing Business, Multivariate Study, Principal Component Method, Varimax Rotation, Multicollinearity, Variance Inflation Factors, Statistical Modeling, Global Rankings, Business Regulations, Data Dimension Reduction, Predictive Analysis, Economic Indicators.
Frequently Asked Questions
What is the core focus of this project?
The project focuses on evaluating and predicting the "Ease of Doing Business" in various countries using multivariate statistical analysis.
What are the primary themes of the study?
Key themes include regulatory environment, business startup costs, property rights, investor protection, and international trade regulations.
What is the main research question or goal?
The main objective is to identify which countries are better environments for doing business by processing a large set of continuous variables.
Which scientific methods are utilized?
The study employs Factor Analysis for dimension reduction and Multiple Linear Regression to model the impact of various factors on the ease of doing business.
What is covered in the main section?
The main section covers the methodologies for sub-indices like starting a business, getting credit, paying taxes, and the subsequent statistical analysis of these indices.
Which keywords define the research?
Keywords include Factor Analysis, Multiple Linear Regression, Ease of Doing Business, and Multicollinearity.
Why is Factor Analysis used in this study?
Factor Analysis is used to reduce the high number of variables (40) into a smaller, manageable set of factors while retaining the underlying information.
How is the ranking of countries determined?
Rankings are determined by calculating factor scores and averaging them to generate an ordered sequence for all 189 countries analyzed.
- Quote paper
- Sugabalan Sivagnanam (Author), 2014, A multivariate study on Ease of Doing Business to predict a country, Munich, GRIN Verlag, https://www.grin.com/document/277375
