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Topic: Student Questions

Low R Square

Posted by Anonymous on 4/23/2008 at 8:17 AM ET 250 Points
i'm doing my final semester thesis. the findings show the low R square which is only 38.2%, the R is 61.8%.so how can i explained this situation?i'm doing research on exchange rate and Foreign Direct Investment
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  • Posted by dmmarathe on 4/24/2008 at 4:44 AM Accepted
    I will assume that FDI is dependent variable & exchange rate is independent variable. Variation in FDI is explained to the extent of 38.2% by exchange rate. Remaining variation is due to other factors which you have not considered in your model. These may be GDP, GNP, Population, inflation rate, unemployment rate etc.
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