Browsing by Author "Getachew Andualem"

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    Determinant of Export Performance: Case of Agro Processing Industries in Ethiopia Using Time Series Analysis
    (Addis Ababa University, 2023-02) Getachew Andualem; Berhanu Denu (PhD)
    Globalization forces countries to take their comparative advantage in the global market. Export plays a vital role in economic development of a nation as well as for the development of the particular exporting companies. Although, the benefits derived from export of agro processing products in an increasingly globalized marketplace are enormous, but for many industries, exporting agro processing is constrained by numerous challenges. The purpose of the study was to investigate the major determinants of the export performance of the four selected commodities of Ethiopia namely: leather & leather products, meat and meat products and fruits & vegetables and beverage products. The paper empirically examined the export performance and its major determinant factors in the Ethiopian context using time series data for the period 1991 - 2021 using a secondary data. To analyze the relationship between the export commodities and their determinants, gross domestic products (GDP), foreign direct investment(FDI),real effective exchange rate (REER) and trade openness (TOP) ,inflation and infrastructure (road) were used, VAR model that was applied and estimating by ordinary least square (OLS) regression analysis with Time series data data. The result from econometric analysis revealed that the infrastructure (paved road in kilometer) is the only variable significantly and positively affects the export of the selected commodities. Similarly, GDP positively and significantly affects the export performance of leather & leather products and fruit & vegetable products .Foreign direct investment (FDI) has positive and significant effect on the export of meat, fruit & vegetable and beverage products. While trade openness (TOP) has negative coefficient and significant effect on the export of leather & leather products, meat and beverage products, but it has positive and statistical significant with on the export of fruit& vegetable products. Since all the export commodities were positively impacted by infrastructure (road), increasing quality and coverage of road development would bring a vital outcome for increasing the export performance of the agro processing commodities, which can be regarded as the key finding for the research. From the result, the study concluded that the export performance of the agro processing industries in Ethiopia have been affected by the independent macroeconomic variables. In general, due its potential the export of the agro processing product is increasing time to time. This is due to the fact that the government has prioritized the sector and as a result the agro processing sector is growing. But still there are various external and internal microeconomic and macroeconomic factors that are adversely affecting the export performance of the sector.