Problem: A researcher is investigating the impact of a firm's capital intensity on its labour productivity using data for the year 2014 for a sample of manufacturing firms from Germany, France, Sweden, Italy and the UK. She has estimated the following model:
LP = 190 + 0.3 x CAPIN - 31.8 x FR + 65.4 x SE + 15.8 x UK - 25.1 x IT
where:
LP is the firm's labour productivity (measured as turnover per employee, in E000s per employee);
CAPIN is the firm's capital intensity (measured as total assets per employee, in E000s per employee);
FR is a dummy variable that takes the value 1 if the firm is French and 0 otherwise;
SE is a dummy variable that takes the value 1 if the firm is Swedish and 0 otherwise;
UK is a dummy variable that takes the value 1 if the firm is British and 0 otherwise;
IT is a dummy variable that takes the value 1 if the firm is Italian and 0 otherwise.
Enter in the box below the predicted value of labour productivity for a French firm with a capital intensity of E 100 000 (CAPIN=100):