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Where: RRSS = Restricted Residual Sum Square residual sum
square for PLS model URSS = Unrestricted Residual Sum Square residual sum
square for FEM model N = the number of cross-section data
T = the number of time-series data K = the number of explanatory variable
The requirements to reject H is: H
is rejected if the F chow is F table or if the probability of F chow is
α 0.05.
b Hausman Test
The aim of Hausman test is to determine whether FEM or REM that will be used to processing the data. The
hypothesis for Hausman test is: H
= REM model H
1
= FEM model The base for reject the H
is using statistic consideration of chi square. If the Hausman test is
49
significant probability of H ausman α, thus the null
hypothesis is rejected and the FEM model is used.
5. t-Test
t-test shows how much effect of every single dependent variable toward the dependent variable. The hypothesis for t-test is:
H = the independent variables are not affect the dependent variable
H
1
= the independent variable are affect the dependent variable H
is rejected if the t
statistic
t
table
or if the probability of t
statistic
α. The siginificance level that used in this research are 1 0.01, 5 0.05 and
10 0.10.
6. F-test
F-test used to measure, do the independent variables simultaneously affecting the dependent variable. The hypothesis for this test is:
H = the independent variables are simultaneously not affecting the
dependent variable H
1
= the independent variables are simultaneously affecting the dependent variable
H is rejected if
F
statistic
F
table
or if the probability of F
statistic
α
50
7. Adjusted R
2
Adjusted R
2
is the determination coefficient that explain how much the dependent variable variant described by the model in the whole. The
value of adjusted R
2
is in between 0 and 1. More closer the value of R
2
to the 1, it means that the independent variables perfectly affecting the
dependent variable or with the other word, the model can describe the variant of dependent variable well.
E. Variable Operational Research
1. Independent Variables
Independent variable is one that influences the dependent variable in either postivie or negative way. When the independent variable is present,
the dependent variable is also present Sekaran, 2003:89. The independent variables used in this research are:
a. GDP Growth
GDP is 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. Annual percentage growth rate of GDP at market prices based on constant local currency.
b. Inflation
Inflation as measured by the Consumer Price Index reflects the annual percentage change in the cost to the average consumer of
acquiring a basket of goods and services.
