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?Why do small firms export? What motivates small firms to
Chapter 7, Problem 45E(choose chapter or problem)
Why do small firms export? What motivates small firms to export their products? To answer this question, California State University Professor Ralph Pope conducted a survey of 137 exporting firms listed in the California International Trade Register (Journal of Small Business Management, Vol. 40, 2002). Firm CEOs were asked to respond to the statement “Management believes that the firm can achieve economies of scale by exporting” on a scale of 1 (strongly disagree) to 5 (strongly agree). Summary statistics for the n = 137 scale scores were reported as \(\bar{x}=3.85\) and s = 1.5. In the journal article, the researcher hypothesized that if the true mean scale score exceeds 3.5, then CEOs at all California small firms generally agree with the statement.
a. Conduct the appropriate test using \(\alpha=.05\). State your conclusion in the words of the problem.
b. Explain why the results of the study, although “statistically significant,” may not be practically significant.
c. The scale scores for the sample of 137 small firms are unlikely to be normally distributed. Does this invalidate the inference you made in part a? Explain.
Questions & Answers
QUESTION:
Why do small firms export? What motivates small firms to export their products? To answer this question, California State University Professor Ralph Pope conducted a survey of 137 exporting firms listed in the California International Trade Register (Journal of Small Business Management, Vol. 40, 2002). Firm CEOs were asked to respond to the statement “Management believes that the firm can achieve economies of scale by exporting” on a scale of 1 (strongly disagree) to 5 (strongly agree). Summary statistics for the n = 137 scale scores were reported as \(\bar{x}=3.85\) and s = 1.5. In the journal article, the researcher hypothesized that if the true mean scale score exceeds 3.5, then CEOs at all California small firms generally agree with the statement.
a. Conduct the appropriate test using \(\alpha=.05\). State your conclusion in the words of the problem.
b. Explain why the results of the study, although “statistically significant,” may not be practically significant.
c. The scale scores for the sample of 137 small firms are unlikely to be normally distributed. Does this invalidate the inference you made in part a? Explain.
ANSWER:Step 1 of 4
a) We have to conduct the test at \(\alpha=0.05\)
Here the claim is that the CEOs at all California small firms generally agree with the statement
That the true mean scale score exceeds 3.5
The null hypothesis \(H_{0}: \mu=3.5\)
The alternative hypothesis \(H_{1}: \mu>3.5\) ( Right tailed test )