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Analyzing Factors Affecting the Trade Balance:
Multiple Linear Regression Model
Tan Jie Ying
Supervisor: Dr. Syerrina Binti Zakaria
Bachelor of Science (Financial Mathematics)
School of Informatics and Applied Mathematics
Trade balance (TB) is difference between the value of exports with the value of imports
in a country. TB can affect a country's economic strength. Therefore, this study aims to
identify the relationship of factors affecting TB in Malaysia. Data for 32 years (1985 –
2016) collected from the Malaysian Statistics Department, World Bank, economics trading
and Index Mundi. Next, this data was analyzed by using Pearson correlation and multiple
linear regression. Analysis correlation shows that FDI, REX, GEXP, HCEXP and MGR have
correlation to TB. It is found that the GEXP and HCEXP factors have multicollinearity
problems. Hence these two factors will be analyzed using two different regression models.
The best model was found by involving several independent variables to have significant
impact on TB which are FDI, REX, GEXP and MGR. The results of this study are expected
to be used as reference for researchers in relevant field.
895 | UMT UNDERGRADUATE RESEARCH DAY 2018