The Determinates of Export in Ethiopia, an Auto Regressive Distributive Lag Bound Test Approach
Journal of World Economic Research
Volume 9, Issue 1, June 2020, Pages: 20-26
Received: Sep. 4, 2019; Accepted: Oct. 24, 2019; Published: Jan. 7, 2020
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Israel Bereket, Department of Economics, Jinka University, Jinka, Ethiopia
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This paper identified some of the main determinants of export in Ethiopia for the period 1977-2016 G. C. Also the paper tried to include new variable such like export diversification index and financial development as one determinant which are not considered in the most of the previous research conducted under this area, moreover the study used a bound test approach which is not used by previous research under this area. To test empirically the relationship between export performance and its major selected determinants such as: real gross domestic product, real effective exchange rate, financial development, export diversification index, terms of trade, total investment, trade openness and major trade partner GDP per capita i.e. China. The bound testing approach of co-integration and error correction model, within the Auto Regressive Distributive Lag Model frame work is developed. The estimated results show that all explanatory variables listed above significantly affect the export performance both in short run and long run except financial development and export diversification index. With sign of coefficients all determinates variable sign is consistent to economic theories. Finally the finding indicates that policy makers should give emphasis for the determinants factor of export. Also measures must be taken to reduce the constraints deterring the performance of the export sector through diversifying and promote exports by boosting domestic capital for exports, serving to transfer technology, new product for exports, making access to new and large foreign markets easily and improving technical and management skills and Lowering barriers to firm’s entry and reducing international trade cost.
Export Performance, Auto Regressive Distributive Lag Model, Export Diversification Index
To cite this article
Israel Bereket, The Determinates of Export in Ethiopia, an Auto Regressive Distributive Lag Bound Test Approach, Journal of World Economic Research. Vol. 9, No. 1, 2020, pp. 20-26. doi: 10.11648/j.jwer.20200901.13
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