Analysis of macroeconomic factors effect to gross domestic product of Bosnia and Herzegovina using the multiple linear regression model

Abstract

This paper presents the application of the multiple regression analysis model in macroeconomic research using the model of Bosnia and Herzegovina in the period from 2005 to 2018. The objective of the research is to evaluate the effects of macroeconomic factors (independent variables) to gross domestic product (dependent variable), and based on theoretical and methodological research. Applying the Enter method, out of six independent variables, they are all included in the regression model, whereas the sequence of inclusion in the model is the following: foreign direct investments, Import, Export, Growth rate, unemployment and inflation. Numerous research indicate positive connection between gross domestic product as the dependent variable and foreign direct investments, Import, Export, Growth rate, unemployment and inflation, as independent variables. Other factors negligibly explain the most important indicator of economic activities of a country. Our assignment is to either confirm or reject the abovementioned statement.