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Determinants of Export Performance in Ethiopia: A Var Model Analysis

Abstract: 

Despite encouraging improvements in recent decades, Ethiopia’s export performance has typically been portrayed as poor compared with other sub Saharan African countries. Even though there are different efforts to increase the country’s export, still the performance is poor. Hence, the major objective of this paper is to investigate factors that determine the export performance of the country by using an econometric model for the period 1970/712010/11. The long run and short run estimates are investigated using Johansson cointegration and Vector Error Correction approaches. The findings of the study revealed that in the long run export performance has found to be positively influenced by real effective exchange rate, openness, RGDP of home country, infrastructural development and private credit as a ratio of GDP (financial development). The RGDP of trading partner has found to be statistically insignificant. Hence, the long run elasticities of export performance with respect to real effective exchange rate, openness, RGDP of home country, infrastructural development and private credit as a ratio of GDP (financial development) are 0.7, 0.54, 1.7, 0.3 and 0.44 respectively. In the short run only last year openness has directly involved in enhancing export performance of current year. Maintaining high and sustainable economic growth, improvements in infrastructural facilities and credit access, and maintaining conducive and stable exchange rate policies as well as working to reduce trade restriction mechanism should due emphasis so as to improve Ethiopia’s export performance.

Corporate Author: 
Getnet Alemu, Worku Gebeyehu, Demirew Getachew (Editors) & Ethiopian Economic Association (EEA)
Publisher: 
Ethiopian Economic Association (EEA)
ISBN/ISSN: 
978-99944-54-37-2
Primary Descriptors: 

Trade

Secondary Descriptor: 

Vector Error Correction;   Johansson co‐integration

Geographic Descriptors: 
Ethiopia
Cataloge Date: 
03/11/2015
Broad Subject heading: 
Export
Call Number: 
330.963 PRO 2014
Serial Key Title: 
Proceedings of the Eleventh International Conference on the Ethiopian Economy
Publication catagory: 
Content type: 
Volume: 
I
Publication date: 
2014-06-02 00:00:00
Forum or Discussion date: 
2013-07-17 00:00:00
Place of publication: 
Addis Ababa, Ethiopia
Type of material: 
Book
Current frequency: 
Annually