Development Economics

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Browsing Development Economics by Author "Debebe, Sisay (PhD)"

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    Adoption Of Agricultural Technology Packages In Barley Based Farming System Of Ethiopia
    (Addis Ababa University, 2021-09) Getnet, Ermias; Debebe, Sisay (PhD)
    Despite the high production potential and the economic importance of the crop, adoption, and diffusion of barley technologies are constrained by various factors. To this end, this study aimed at identifying determinants of adoption of agricultural technologies in the barley-based farming system of Ethiopia, with the specific objectives of identifying factors affecting Agricultural technology package choice and to assess the interdependency between the technologies. The study used data from the Ethiopian socioeconomic survey. The descriptive and econometric analytical tools were applied. The descriptive result of the study identified that variables like education, family size, credit access, farm size, farm income, and age of the farmer play significant roles, across barley technologies. The results show that about 66.96%, 58.59%, 75.18%, 65.17%, and 75.99% of sample households were adopted an improved variety of barley, urea, dap, chemicals, manure, and crop rotation respectively. All the barley production technologies were complementary (i.e. urea, improved variety, dap, chemicals, manure, and crop rotation). Multivariate probit model results showed that Age of household head, Soil fertility, farm size, Training, and transportation cost affect the adoption of barley technologies negatively and significantly. Sex of household head, education level of household head, Farm income, tropical livestock unit, and access to credit affects adoption of barley technologies positively and significantly. Smallholder farmers were more likely to succeed than fail in jointly adopting barley technologies. Consequently, government policy and other concerned parties should emphasize the improvement of the institutional support system and decrease gender disparities in access to such institutions.
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    Assessment Of Public Expenditure And Its Impact On Agricultural Growth In Ethiopia
    (Addis Ababa University, 2021-02) Wondmagegne, Eden; Debebe, Sisay (PhD)
    This research deals with identifying those public expenditure factors affecting agricultural growth in Ethiopia. The study is based on a time series data of 38 years from 1980/81 to 2018/19. During this period, the country’s economy has experienced both upswing and downswing in its agricultural sector. Government expenditure in different sectors including agriculture and its allied activities, education, health and roads construction is expected to promote agricultural growth. Here ARDL approach to co integration and an error correction representation of the ARDL model have been used due to certain advantages. The result of the Bounds test indicates the presence of a long-run co integrating relationship between the variables in the study. The results reveal that in the long-run, the effect of public expenditure through recurrent expenditure, on agricultural growth is significantly negative, while expenditure on education and health to enhance agricultural growth are significantly positive on the short-run that is in line with several earlier studies. Public expenditure in capital and roads construction to enhance agricultural growth is significantly negative in the short-run however public expenditure on capital, education, health, and roads construction to enhance agricultural growth do not significantly affect agricultural growth in the long-run. The discoveries reveal that prudent utilization of government expenditure cans possibly accelerate agricultural development and improve its efficiency.
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    Determinants of Urban Household Saving in Sebeta Town of Oromia, Ethiopia
    (Addis Ababa University, 2021-09) Husien, Osman; Debebe, Sisay (PhD)
    The saving, a process of keeping money/asset aside, has been shown to have a positive impact on economic growth at the macroeconomic and micro-levels-it is one of the key components in any development that is believed to be the surest way of increasing income and reducing poverty. But, the micro-level (Household saving level) analysis of determinants of households’ saving is limited in Sub-Saharan African economies. Understanding determinants of saving at household level helps to visualize appropriate response strategies in terms of targeted saving packages. This study therefore investigates determinant of households in Sebeta town of Oromia region, Ethiopia. The study’s objectives include analyses of forms of saving used by urban households, to assess main motives of saving by households and to investigate the major determinants (constraints, opportunities and factors) of household saving. The research has involved both qualitative-focus group discussions and quantitative (household survey) method. Purposive and random sampling techniques were employed in order to select the sample within Sebeta town and study respondents, respectively. The data of 392 households and FGD have been collected from urban households by using interview and open discussion schedules. To collect the required primary source of data, instruments of data collection which include questionnaire was used. This study used both descriptive and econometric (two-part model) analyses. The result of the descriptive analysis showed that almost more than half of the sample households experienced saving and the reasons for households unable to save were inflations, very low income, investing in another assets and high expenditure on consumer goods specifically on Alcohols. The econometric analyses showed that income, expenditure, number of earners in the household member, house ownership, inflations, and availability of remittances and family size are significant determinants of household saving in study area. Based on the findings it is concluded that the determinants of the household heads saving are influenced by demographic and economic factors based largely on family size and number of earners in the households i.e they are the most crucial factor of the household saving in the this study. In the households, holding all other variables constant at their mean values, when household family size and number of earners increase by one individual, the expected amount of saving by households would increases by 32,339.51 birr and 84,218.74 birr yearly, respectively. The marital status had increased by one leads to 6.5 birr decrease the households saving. Holding other variables constant, change in house ownership of households head from “not owned to owned” and accessibility of remittances from ‘not access to access’, the probability of saving increase at about 34.5 percent and 22%, respectively. Based on the results, it is recommended that concerned institutions should emphasise on livelihood interventions targeted to improve the household income which have a round effect on saving and income growth, socio economic saving barriers, housing, on the importance of saving and saving modalities, planning and expenditure controlling habit, investment and the economic growth. Creating employment opportunity strategies for women to decrease fertilities and conducting practical awareness creations for households on importance of saving as well as adverse impact of extravagancy.
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    The Impact of Bank Lending on Economic Growth in Ethiopia
    (Addis Ababa University, 2021-07) Yigrem, Fikremarkos; Debebe, Sisay (PhD)
    In Ethiopia, the banking sector is an important part of the financial system. However, studies on the relationship between bank lending and economic growth has not been conclusive. The purpose of this thesis is to investigate the impact of bank lending on economic growth in Ethiopia. By using Autoregressive distributed lag model, the relationship between bank lending and economic growth is investigated. Results from level ARDL model confirms that in the presence of other macroeconomic control variables, the PSC is positively and statistically significantly determining economic growth after some periods (lags) only. On the contrary, bank lending rate is found to be statistically significant in determining economic growth in the current period only. In addition, the granger causality test shows that there is bidirectional causality between bank lending and economic growth; on the contrary, no causal relationship is seen between lending rate and other variables in Ethiopia. The overall findings shows that, although the impact is to some extent depends on the bank lending indicator, the overall evidence suggested that, bank lending is contributing positively to Ethiopian economic growth. Hence, policies to encourage further development in bank lending and the integration of finance sector with other governmental institutions should be designed in improving Ethiopian economy.
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    The Impact of Budget Deficit and Aid on Economic Growth in Ethiopia
    (Addis Ababa University, 2021-02) Gebre, Eshetu; Debebe, Sisay (PhD)
    The study provides empirical results to investigate the relationship between budget deficit, aid and economic in Ethiopia. Specifically the existence of the relationship between budget deficit, aid and economic growth in the country was tested with secondary time series data starting from 1990/91 to 2018/2019. Data from National bank of Ethiopia, ministry of finance and economic development and world development indicators collected through organizations' database and through letter requesting the same was used to conduct the study. VAR (vector Auto regressive approach) and vector error correction model (VECM) approach was used to investigate the relationship between budget deficit and economic growth while Harrod-Domer to investigate the relationship between aid and growth. The major findings of the study were positive relationship between budget deficit and economic growth both in the short run and long runs which supports Keynesians theory. However, aid has positive relationship with economic growth in the short run and negative impact in the long run. According to the VECM result a percentage change in aid results in 0.18% decrement of economic growth and a percentage change in budget deficit results in 0.16% increment of economic growth other variables being constant. The study suggests the increase of revenue by broadening tax base through establishing pragmatic system and expend on prioritized productive sectors like health, education, infrastructure sectors such as power, telecom, roads etc., so that it will enhance the return of both human capital and physical capital, which will go a long way in increasing the national income. Keywords: Budget Deficit, Aid, Economic Growth, GDP, Ethiopia, VAR, VECM
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    The Impact of Financial Development on Poverty, Growth and Inequality in Ethiopia
    (Addis Ababa University, 2021-08) Della, Amanuel; Debebe, Sisay (PhD)
    In fighting to eradicate poverty from the world, examining the factors that are determining growth, poverty and inequality is one of critical steps. As a result of this, during the past decades, the research on the impact of financial development on welfare has got a lot of attention. Thus, this study deals with assessing the direct and indirect effect of financial development in reducing poverty by considering the simultaneous effects of economic growth and inequality in Ethiopia. In order to investigate this, the time series data has been used with simultaneous equation model for the period of 1991 to 2019. Based on the econometric analysis results, first, the finding shows that through the direct channel, financial development increases the proportion of population living below the national poverty line. This is due to the financial intermediaries are not adequately channeling finance to the pro-poor sectors and SMEs. Second, financial development enhances poverty reduction and lift up the poor through indirect channels of economic growth and income distribution. Third, institutional quality plays a crucial role in poverty reduction. Finally, the inverted “U” shape of Kuznets curve that is explaining the average income and inequality in the long run is not robust and the model is unverified. In the addition, another interesting finding is that there is a long run cointegration relationship between financial development and poverty eradication. Therefore, it is concluded that finance plays a significant role on poverty reduction, growth and income distribution. So the government shall design a policy which is pro-poor and SMEs to assure access of financial services to enhance entrepreneur innovation, productivity, human capital and industrial development.
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    The Impact of Government Expenditure on Economic Development Outcomes in Ethiopia
    (Addis Ababa University, 2021-08) Kefyalew, Biniam; Debebe, Sisay (PhD)
    Using a time series data from 1990-2020, this study employs the augmented Solow human-capital-growth model to investigate the impact of government expenditure on economic deveopment outcomes in Ethiopia. Expenditure on public health and education were taken as proxy variables for human capital development in order to see their impact on economic development. The Augmented Dickey Fuller test is employed to test for stationarity and Johansen Cointegration technique is used to validate cointegration among variables as a sign of long run relationship. The error correction model is used to adjust for the short run error correction. Further tests of autocorrelation and residual normality distribution were done. The result of the ADF test has shown that all variables are non-stationary at level I (0) and stationary at I (1). There are two cointegrating equations implying convergence. The result of the error correction model show that the model is adjusting at a relatively stable rate of 61 % towards the long run equilibrium. The result of the short run causality tests show public expenditure on education, public expenditure on health have significant effect.
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    The Nexus Between Foreign Direct Investment, Domestic Investment and Economic Growth in Ethiopia
    (Addis Ababa University, 2021-01) Eshete, Abebaw; Debebe, Sisay (PhD)
    This study empirically studied the link between FDI (Foreign Direct Investment), domestic investment (private and public investment) and economic growth of Ethiopia for the period 1992 to 2019 by applying time series modelling and tests. ADF test for unit root result indicates all the variables are integrated of order one I (1), at their first differences. Johansen cointegration test shows the presence of cointegration among the variables in the long run. The long run estimates it indicated that domestic investment (private and public) and FDI have a positive relationship with economic growth, while, exchange rate was insignificant and negative relationship with economic growth of Ethiopia. Meanwhile, the Error Correction Term result indicates, the long run economic growth shock is adjusted (back to) equilibrium by 48% within a year. The pairwise Granger causality result showed economic growth Granger causes, FDI and vise-versa and there exist a bi-directional causality between FDI, exchange rate and economic growth. Impulse Response Function (IRF) indicates the response of economic growth to a unit standard deviation/shock/ on FDI, private investment, public investment and exchange rate were positive. Variance decomposition showed, the variability of economic growth fluctuation explained at the first period by itself and 73.7% shock explained in the second period, and 26.3% of shock is explained by FDI, exchange rate, private and public investment as a whole. Finally, as a policy implication the study recommends, government enhancement of private investment and FDI by removing of bottlenecks, such as volatility of exchange rate and creating fertile environment of investment in Ethiopia.