Economics
Permanent URI for this collection
Browse
Recent Submissions
Item Financial Deepening and Economic Growth in Ethiopia(Addis Ababa University, 2026-04-03) Geza Mulaaw; Jemberu.NEthiopia has undergone significant financial sector transformation since 1991, yet the extent to which financial deepening translates into sustained economic growth remains an open empirical question. Existing studies are largely confined to conventional banking indicators such as broad money and private sector credit, and most predate the rapid expansion of mobile money platforms and the substantial growth of diaspora remittances, leaving a critical gap in the empirical literature. This study is motivated by the need to provide updated, comprehensive evidence on the finance-growth nexus in Ethiopia by incorporating both traditional and emerging financial indicators within a single analytical framework. Annual time series data covering the period 1990 to 2025 are used sourced from the National Bank of Ethiopia, the World Bank World Development Indicators, the International Monetary Fund Article IV reports, and Ethio Telecom annual publications. The Autoregressive Distributed Lag bounds testing approach combined with an Error Correction Model is employed as the method of analysis, given its suitability for small samples and its capacity to handle variables of mixed integration orders. The key findings reveal that a stable long-run relationship exists among all variables. Financial account ownership and remittances are the most significant long-run drivers of economic growth, while broad money and private sector credit are statistically insignificant in the long run. In the short run, financial account ownership exerts the largest positive effect on growth, whereas public debt crowds out growth significantly. Inflation is consistently negative across both time horizons. These findings carry important policy implications. Policymakers should prioritize expanding digital financial inclusion, reducing remittance transfer costs, improving credit allocation toward the private sector, and maintaining price stability as a precondition for financial deepening to deliver meaningful and sustained economic growth in Ethiopia.Item Effects of Corporate Governance on the Financial Performance of Commercial Banks in Ethiopia(Addis Ababa University, 2026-06-02) Temesgengen Teshale; Sisay RegassaThis paper would research on the impacts of corporate governance on the financial performance of commercial banks in Ethiopia. The paper analyses one hundred and ten bank-years of panel data of ten commercial banks during the time 2014-2024. There are six governance variables, including board size, board independence, CEO duality, audit effectiveness, frequency of board meetings, and ownership concentration. ROA and ROE are used to measure financial performance. The research design used is explanatory research design based on a quantitative approach. In the case of Hausman test, fixed effects regression is employed. Diagnosis checks show that there is no heteroskedasticity and autocorrelation, but multicollinearity is observed between the independence of the board and audit performance. Both Return on Assets and Return on Equity have negative and statistically significant correlation with the board size, which have an adverse impact on the financial performance of large boards. CEO duality is observed to positively and significantly influence both the performance measures hence indicating that unified leadership is effective in promoting performance within the Ethiopian context. Concentration of ownership has adverse impact on Return on Assets as well as Return on Equity. Returns on Assets are not impacted by audit effectiveness in a negative way. No significant effects are found in board independence and the frequency of meeting. The models account about seventy one percent of within bank variation in performance. These results undermine traditional wisdom of governance and create an indication that Ethiopian banks require context-specific governance structures. The research suggests that the NBE should issue purer procedures on optimum board size, indorsing an adequate range that heightens efficiency and decision-making. Management should evaluate leadership structure based on ownership bank size, and operational complexity instead of implementing uniform corporate governance practices. Investors should pay close attention to ownership structure and board size when making investment decisions, as higher board size and high ownership concentration are negatively affect financial performance.Item Effects of Corporate Governance on the Financial Performance of Commercial Banks in Ethiopia(Addis Ababa University, 2026-06-02) Temesgengen Teshale; Sisay RegassaThis paper would research on the impacts of corporate governance on the financial performance of commercial banks in Ethiopia. The paper analyses one hundred and ten bank-years of panel data of ten commercial banks during the time 2014-2024. There are six governance variables, including board size, board independence, CEO duality, audit effectiveness, frequency of board meetings, and ownership concentration. ROA and ROE are used to measure financial performance. The research design used is explanatory research design based on a quantitative approach. In the case of Hausman test, fixed effects regression is employed. Diagnosis checks show that there is no heteroskedasticity and autocorrelation, but multicollinearity is observed between the independence of the board and audit performance. Both Return on Assets and Return on Equity have negative and statistically significant correlation with the board size, which have an adverse impact on the financial performance of large boards. CEO duality is observed to positively and significantly influence both the performance measures hence indicating that unified leadership is effective in promoting performance within the Ethiopian context. Concentration of ownership has adverse impact on Return on Assets as well as Return on Equity. Returns on Assets are not impacted by audit effectiveness in a negative way. No significant effects are found in board independence and the frequency of meeting. The models account about seventy one percent of within bank variation in performance. These results undermine traditional wisdom of governance and create an indication that Ethiopian banks require context-specific governance structures. The research suggests that the NBE should issue purer procedures on optimum board size, indorsing an adequate range that heightens efficiency and decision-making. Management should evaluate leadership structure based on ownership bank size, and operational complexity instead of implementing uniform corporate governance practices. Investors should pay close attention to ownership structure and board size when making investment decisions, as higher board size and high ownership concentration are negatively affect financial performance.Item Assessing Day Labour Exploitation in Burayu Town.(Addis Ababa University, 2026-05-02) Degne Beksisa; Martha KibruIn Sheger City, Burayu Sub City, this study looked at "Day labor exploitation: sectorial pattern, determinants and socio-economic consequences." OLS regression was used to examine the information gathered from 450 people. The findings demonstrated pervasive labor exploitation, which was characterized by long hours, unpaid labor, dangerous working conditions, pay delays, wage decreases, and maltreatment at work. The majority of the workforce consisted of migrants from rural areas, who were mostly employed in the manufacturing and construction industries. Labor exploitation is widespread across all industries and sectors, according to the inferential study, which identified no discernible distinctions in labor exploitation between work sectors. Rather than particular demographic traits, the main causes of labor exploitation were unstable working conditions, such as the absence of formal contracts, delayed wages, dangerous workplaces, stress at work, and a lack of labor protection organizations. Additionally, the study found that exploitative labor practices had a detrimental effect on workers' long-term job security, well-being, economic, and income stability. Overall, the findings show that Sheger City Burayu sub City's labor exploitation is mostly institutional and structural in character, calling for more stringent labor laws, formal employment contracts, and improved worker protection measures.Item Assessing Day Labour Exploitation in Burayu Town.(Addis Ababa University, 2026-05-03) Degne Beksisa; Martha KibruIn Sheger City, Burayu Sub City, this study looked at "Day labor exploitation: sectorial pattern, determinants and socio-economic consequences." OLS regression was used to examine the information gathered from 450 people. The findings demonstrated pervasive labor exploitation, which was characterized by long hours, unpaid labor, dangerous working conditions, pay delays, wage decreases, and maltreatment at work. The majority of the workforce consisted of migrants from rural areas, who were mostly employed in the manufacturing and construction industries. Labor exploitation is widespread across all industries and sectors, according to the inferential study, which identified no discernible distinctions in labor exploitation between work sectors. Rather than particular demographic traits, the main causes of labor exploitation were unstable working conditions, such as the absence of formal contracts, delayed wages, dangerous workplaces, stress at work, and a lack of labor protection organizations. Additionally, the study found that exploitative labor practices had a detrimental effect on workers' long-term job security, well-being, economic, and income stability. Overall, the findings show that Sheger City Burayu sub City's labor exploitation is mostly institutional and structural in character, calling for more stringent labor laws, formal employment contracts, and improved worker protection measures.Item "The Effect of Remittances on Economic Growth in Ethiopia an ARDL Approach with Structural Break Analysis"(Addis Ababa University, 2026-05-03) Dawit Sefiw; Mengesha YayoThis study examined the effect of remittances on economic growth in Ethiopia using annual time-series data covering the period 2000–2024. The study employed the Autoregressive Distributed Lag (ARDL) approach to investigate both the short-run and long-run relationships between remittances and economic growth while accounting for structural breaks associated with the COVID-19 pandemic. Real Gross Domestic Product (RGDP) was used as a proxy for economic growth, whereas remittances, gross capital formation, foreign direct investment, financial development, trade openness, inflation, and a COVID-19 dummy variable were included as explanatory variables.Secondary data were obtained from the World Bank, the International Monetary Fund (IMF), and the National Bank of Ethiopia (NBE). The stationarity properties of the variables were examined using Augmented Dickey-Fuller (ADF), Phillips-Perron (PP), and Zivot-Andrews structural break tests. The ARDL bounds test confirmed the existence of a long-run cointegrating relationship among the variables. The long-run estimation results indicate that foreign direct investment and financial development have a positive and statistically significant effect on economic growth in Ethiopia. In contrast, the COVID-19 structural break variable exerts a significant negative effect on economic growth. Although remittances exhibit a positive coefficient, their effect is statistically insignificant in both the long run and short run. Similarly, gross capital formation, trade openness, and inflation were found to have insignificant effects on economic growth. The error correction model confirms a stable long-run equilibrium relationship, with a significant speed of adjustment toward equilibrium following short-run shocks.The study concludes that remittances contribute positively to the Ethiopian economy; however, their growth-enhancing impact remains limited because a substantial proportion of remittance inflows is directed toward household consumption rather than productive investment. The study recommends strengthening financial sector development, promoting formal remittance channels, encouraging productive investment of remittance inflows, and creating an enabling environment for foreign direct investment to enhance sustainable economic growth in Ethiopia.Item Determinants of Sovereign Debt Dynamics in Ethiopia (1990–2022): An ARDL Analysis(Addis Ababa University, 2026-06-03) Lielina Abebe; Jemberu LulieThis research is aimed to investigates the macroeconomic determinants of sovereign debt accumulation in Ethiopia over the period 1990–2022. specifically, it examines the short-run and long-run effects of fiscal deficit, GDP growth, net capital flows, exports, real interest rate, inflation, and conflict on sovereign debt. The study hypothesizes that these macroeconomic variables have significant effects on sovereign debt dynamics in both the short and long run. In order to achieve these objectives uses secondary data from the World Bank, the International Monetary Fund, the National Bank of Ethiopia and the Ethiopian Ministry of Finance. This data is collected over years. The Autoregressive Distributed Lag (ARDL) bounds testing approach is used because it is appropriate for variables integrated at both I(0) and I(1). Stationarity is examined using the Augmented Dickey–Fuller (ADF) test, while cointegration is confirmed using the ARDL bounds test. The Error Correction Model (ECM) is applied to estimate short-run adjustments toward long-run equilibrium. The empirical findings reveal that inflation and conflict are the only statistically significant determinants of sovereign debt. Inflation has a positive and significant long-run effect but a negative short-run effect on sovereign debt. Conflict significantly increases sovereign debt in the short run but exhibits a negative long-run relationship. Although fiscal deficit, GDP growth, exports, net capital flows, and real interest rates influence sovereign debt, their effects are not statistically significant. The findings suggest that maintaining price stability, strengthening fiscal discipline, and promoting political stability are essential for achieving sustainable sovereign debt management in Ethiopia. Future research should incorporate institutional quality, exchange rate dynamics, and governance indicators using higher-frequency data and comparative cross-country analysis.Item Adoption Dynamics of Sustainable Agricultural Intensification Practices and Their Impacts on Household Wheat Productivity Under Recurrent Climate Shocks: Evidence from Rural Ethiopia(Addis Ababa University, 2026-06-02) Mihretu Abera; Hailu EliasSustainable Agricultural Intensification (SAI) is widely promoted to raise wheat productivity among smallholder farmers in Ethiopia. However, recurrent climate shocks and weak insurance and credit markets make sustained adoption difficult. Most existing studies rely on cross-sectional or short-panel data and therefore cannot adequately capture true state dependence, complementarities, or reverse causality. This study examines the adoption dynamics of seven SAI practices and their impact on household wheat productivity under recurrent climate shocks in rural Ethiopia. Using three waves (2021, 2023, and 2025) of the Resilience to Climate Change (RCC) panel covering 598 households, the study applies a Conditional Mixed Process (CMP) framework that jointly estimates seven adoption equations and a wheat yield equation, controlling for self- selection, unobserved heterogeneity, and reverse causality. Three main findings emerge. First, past adoption significantly raises the probability of current adoption for six of the seven practices, indicating true state dependence; the exception is Soil and Water Conservation (SWC), whose lagged effect is insignificant. Second, no individual SAI practice significantly increases wheat yield on its own (joint Wald 𝜒2(7) = 11.73, p = 0.110). Strong error correlations particularly between improved seed and row planting (ρ = 0.478, p < 0.01) and between intercropping and row planting (ρ = 0.428, p < 0.01) show that practices function as complementary bundles. Third, households that persistently adopt the integrated input-plus-NRM package (regime R3) achieve a 57% higher wheat yield than non-adopters (R0). Recurrent climate shocks erode the persistence of chemical fertilizer and SWC adoption by 4.4 and 4.5 percentage points, respectively, and push households toward low-cost fallback practices such as organic manure. These results imply that agricultural policy should move beyond promoting isolated technologies toward supporting integrated, shock-resilient adoption strategies. This insight forms the basis of the Triple-P (Promote–Protect–Persist) framework proposed in the study. Keywords: Sustainable Agricultural Intensification, Technology Complementarities, State Dependence, Recurrent Climate Shocks, Conditional Mixed Process, EthiopiaItem The Role of Entrepreneurial Orientation in Driving Environmental, Economic, and Social Sustainability: The case of Sebeta and Surroundings Smallholder Farmers(A.A.U, 2026-02-03) Belay Teka; Ethiopia LegesseThe purpose of this study was to examine the role of entrepreneurial orientation in ensuring the three sustainability dimensions namely, economic, environmental, and social. Moreover, the study is made among smallholder farmers in Sebeta region and its surroundings. Specifically, the research investigated the mediating effects of strategic innovation and stakeholder integration, as well as the moderating roles of market uncertainty and strategic innovation stakeholder integration interactions. A structured questionnaire was administered to 384 smallholder farmers, yielding a 72.4% response rate. Data were analyzed using SPSS version 25 and Hayes’ PROCESS macro (Models 1 and 4) to test moderation and mediation effects respectively. The findings revealed that entrepreneurial orientation significantly improves economic sustainability, partially mediated by strategic innovation, indicating that innovation serves as a key mechanism for enhancing economic performance. Market uncertainty was found to positively moderate the relationship between EO and environmental sustainability, suggesting that EO becomes more effective in promoting environmentally sustainable practices under uncertain market conditions. Furthermore, stakeholder integration partially mediated the relationship between EO and social sustainability, demonstrating that active stakeholder engagement enhances social outcomes. Based on these findings, the study concludes that strengthening entrepreneurial capabilities, innovation adoption, stakeholder collaboration, and farmers’ capacity to navigate market uncertainty can significantly improve the long-term sustainability of smallholder farming systems. The study contributes to the literature by providing empirical evidence on the mechanisms through which ntrepreneurial orientation drives multidimensional sustainability in agriculture, while recommending that future research incorporate additional mediating and moderating variables to further enrich understanding. Keywords: Entrepreneurial Orientation, Strategic innovation, Stakeholder integration, Market uncertainty, sustainability, Smallholder farmers.Item The Impact of Inflation on Stock Price in Selected African Country(A.A.U, 2025-06-03) Tigist Kassie; Alemu LambamoThe study investigating the impact of inflation on stock price in selected eight African countries, Egypt, Morocco, Tanzania, Kenya, Ghana, South Africa, and Botswana span from 2008 to 2023. The study employed secondary data. The study used panel Auto-regressive Distributed Lag (ARDL) model estimated via pooled mean group (PMG) approach. The study examined the short-run and long-run effect of inflation on stock price as well as other macroeconomic variable as a control variable. Results from the study indicate that inflation has a positive and significance long-run impact on stock price. This also suggests that equity in these markets can serve as a hedge against inflation which supports the fisher effect hypothesis. In contrast shortrun effect of inflation varies significantly across the country. Among those, South Africa, Egypt, Nigeria and Ghana, has positive and significant effect on stock price. This indicates the presence of country specific effect. Broad money supply shows a significant and positive impact on stock price in long-run, in contrast gross domestic product growth rate exhibits a significant and negative impact on stock price. However, there is no significant relationship between deposit interest rate and stock price. The findings also recommend to policy maker emphasizes the need of macroeconomic stability, country specific investment strategy, and for investor may use the information invest in safe investment environment. Key words: Inflation, Stock price, Panel ARDL, PMG estimation, Inflation hedge, Africa stock marketItem Modelling Municipal Solid Waste GHG Emissions in Addis Ababa: a System Dynamics Approach(A.A.U, 2025-06-17) Robera Bayissa; Zerayehu SimeThis study employed a system dynamics model to evaluate greenhouse gas (GHG) emissions of municipal solid waste (MSW) management in Addis Ababa from 2022 to 2034 through the simulation of five treatment scenarios: Business as Usual (BAU), Organic Waste Diversion and Improved Sorting, Energy Recovery Maximization, Recycling-Driven Circular Economy, and a Combined Low Emission strategy. According to the BAU scenario led to faster saturation of the landfill and higher methane emissions, while Organic Diversion and Circular Economy scenarios achieved considerable emission reduction and jobs from recycling and composting. Energy Recovery Optimization scenario optimized incineration, reducing landfill usage but the CO₂ hasn't declined as in the other policy scenarios despite the net cost increasing significantly. The Integrated Low Emission scenario with over 70% efficiency in separation, 25% recycling, 30% composting, and 40% use of waste-to-energy created the lowest overall GHG emissions, less than half of BAU by 2035, and produced the most sustainable outcome in all three aspects: environmental, economic, and social. These findings underlie the importance of integrated, low-emission waste strategies to facilitate a contribution from Addis Ababa to achieving Ethiopia's Climate Resilient Green Economy (CRGE) goals.Item The Effect of Foreign Aid on Economic Growth: the Case of Sub-Saharan African Countries(A.A.U, 2025-06-11) Tofik Mume; Atnafu G. MeskelThis thesis assesses the impact of foreign aid on Sab-Saharan African Economic growth. Its objective is to explain the trend of foreign Aid and assess the effect of foreign Aid on Sub - Saharan African economic growth (GDPPC growth) as measured by GGDP per capital. In order to fulfill its objective, the studies used panel data from 33 SSA countries for 24 years (2000-2024) and using Generalized method of moment(GMM) regression model, this study assess the impact of foreign assistant on economic growth in Sub-Saharan African (SSA). The main variables in this study is GGDP per capita (constant 2021$US) as dependent variable, Labor force participation rate (L), Capital Formation (K), Government Consumption Expenditure (GC), Foreign direct investment (FDI), Trade (T) and Foreign aid (Aid) as Explanatory variable (Independent Variable). The study finds indicate that foreign aid has positive and significant effect on SSA economic growth. The study result also suggests that there is diminishing return of aid as the volume of aid increase in the same countries under the study. As the study finds indicate the effect of foreign aid on Sub-Saharan African Economic growth is very low. Therefore, the countries shall reduce aid dependency and focus on their home economy. Additionally, large set of variable for all Sub-Saharan African countries and including the conditions on which foreign aid may depend for effectiveness like government effectiveness, economic policy and institutional quality is important for the future researchers and policy makers.Item Factors Affecting Labor Turnover Intention in the Garment Industry in Nasa Garment P.L.C (Hawassa Industrial Park)(A.A.U, 2024-06-16) Melat Ayele; Yared AsratThis research study, titled ‘Factors Affecting Labor Turnover Intention in the Garment Industry,’ investigates turnover intentions and identifies the primary causes of employee turnover intention. The study focuses on Ethiopia’s industrial parks, with Nasa Garment serving as the sample organization. An empirical study was conducted at Nasa Garment P.L.C, a local apparel company situated in Hawassa Industrial Park. Quantitative data were collected through questionnaires, employing the random sampling method to select sample and used Solvin’s formula to determine sample size. Data were analyzed using descriptive and inferential statistics, correlation analysis to identify and relationship between the variables; regression analysis to predict the change in the dependent variable when the independent variables change. The results from the analysis of a dataset derived from questionnaires on existence of turnover intention and the factors of the turnover intention, completed by 197 NASA Garment Plc existing employees. The research revealed a consistent high employee turnover rate over the years within the company, resulting in significant costs, particularly related to training new employees. The study’s key findings indicate that there is turnover intention in the current employees of Nasa Garment and the primary factor driving turnover intention is ‘Salary and Benefit,’ followed by ‘Other Employment Opportunity.’ Additionally, there exists a significant negative correlation between ‘Turnover Intention’ and ‘Other Employment Opportunity,’ as well as a negative correlation between ‘Turnover Intention’ and the ‘Salary and Benefit’ factor. . Keywords: Employee, turnover intention, factors, Industry Park.Item Technical Efficiency of Teff Production in Ethiopia(A.A.U, 2025-02-28) Bersabet Shemelis; Hailu EliasEthiopia is the largest producer of Teff, a staple grain with significant cultural and economic importance. This study aims to investigate the technical efficiency score of Teff analyzing factors influencing teff yield using stochastic frontier analysis on “Resilience to climate change” data collected in 2023. The study has found labour input and land size negatively impact efficiency, while livestock in tropical units positively influence it. Fertilizer use, crop rotation, and extension service also contribute to reducing inefficiency while literacy and irrigation use show no significant effect. With a technical efficiency score of 0.787, the study highlights the potential for improving resource utilization. Recommendations for enhancing efficiency include adopting better labour and land management practices, promoting integrated farming systems, increasing fertilizer accessibility and proper usage, and strengthening extension services. Further research is suggested to address barriers and evaluate the long-term impacts of these interventions.Item Nexus Between Credit Accessibility and Growth of Small and Medium Enterprises: The Case of Addis Ababa City Administration(AAU, 2025-12-05) Truwork Tsegaye; Guta LegesseThis study examines the determinants of small and medium enterprise (SME) performance in Addis Ababa, Ethiopia, recognizing the critical role of SMEs in economic development and the persistent challenge of accessing finance in developing nations. Utilizing firm-level data from the World Bank Enterprise Survey (2015), the research employs a mixed-methods approach, integrating descriptive statistics and correlation analysis, and a logistic regression model and ordinary least square model for econometric analysis. The analysis considers firm characteristics such as size, age, loan access, obstacles to finance, and firm- level performance measures. Results reveal that firm size (a6a) is a key driver of sales growth, with larger firms more likely to report positive performance. market orientation (e1) and rotation order (m1d) also influenced performance (sales growth and employment growth). The availability of fixed assets did not significantly predict performance, with the model explaining 40.5% of the variance in performance. The study concludes that easing financial constraints, expanding SME loan schemes, and strengthening targeted policies for micro and small enterprises are critical for performance improvement. Policy recommendations include enhancing financial infrastructure and implementing size- ifferentiated support programsItem Trade Liberalization and Economic Growth in Eastern Africa(AAU, 2025-08-04) Bayeetti Alemayehu; Habtamu AdaneThis study investigates the impact of trade regulations—specifically tariffs, foreign exchange rates,WTO membership, foreign direct investment (FDI), net exports, and terms of trade—on economic growth in eleven East African countries over the period 2000 to 2023. Using panel data and robust econometric techniques, including the Driscoll-Kraay standard error regression, the study accounts for issues of heteroskedasticity, autocorrelation and cross-sectional dependence common in macro- panel data. Descriptive statistics and trend analysis were first employed to explore the economic performance of the region, followed by fixed effects and ultimately Driscoll-Kraay estimations to determine the relationships between trade-related variables and real GDP. The findings reveal that net exports and terms of trade have a strong, positive, and statistically significant relationship with economic growth. In contrast, FDI and tariff rates are negatively associated with real GDP,although both are statistically significant. Surprisingly, WTO membership was also found to have a significant but negative effect on GDP, suggesting that trade liberalization alone may not be sufficient to drive growth in the absence of domestic institutional and structural reforms. The foreign exchange rate had a negative but statistically insignificant effect on growth. Based on these findings, the study recommends that East African countries pursue more strategic trade and investment policies, enhance institutional capacity for engaging in global trade frameworks, and focus on improving export competitiveness and regional trade integration. These measures are essential for translating trade openness into sustained economic development in the regionItem The Determinants of Ethiopia’s Balance of Payment: An Analysis of Disequilibria and Policy Implications(AAU, 2025-07-30) Marartu Alemayehu; Jonse BaneEthiopia has been suffering chronic balance of payments (BOP) disequilibrium for decades, yet few studies have looked at the combined role of structural issues, policy shocks, and governance concerns, above all, political corruption, to explain this imbalance comprehensively. The present study fills the gap by analyzing the principal determinants of Ethiopia's BOP imbalance between 1974 and 2023 with a special focus on economic, structural, and policy-related variables across three political regimes. Using an Autoregressive Distributed Lag (ARDL) specification, the results from the analysis relied on data obtained from the National Bank of Ethiopia, World Bank, Global Economy, and government and research outlets. The long-run findings show that the exchange rate is statistically significant by itself, and hence currency depreciation is helpful in increasing the BOP in the long run. They have powerful impacts in the short term. FDI, external debt, inflation, and exchange rate as well as past BOP levels have powerful short-run impacts. Policy actions and anti-corruption measures also have negative short-run impacts accounting for transitional adjustment costs. The robustness of the model is verified by diagnostic tests. The results stress the pivotal role of exchange rate management to bring about long-run external balance and imply that exchange rate flexibility can be used to strengthen export competitiveness. Added to this, careful management of FDI and external debt can remove short-run external imbalances. Policy and governance reforms are mandated nonetheless, but these need to be sequenced properly in order not to trigger short-run volatility yet achieve long-run BOP sustainabilityItem Determinants of Rural Households’ Access to Credit and Its Impact on Households’ Food Security and Crop Productivity: Evidence from Ethiopia(A.A.U, 2025-06-01) Amanuel Nigus; Gebeyehu ManieThis study examined the determinants of rural households’ access to credit and its impact on household’s food security and crop productivity in rural Ethiopia. To this end it employed a secondary data of 1524 rural households participated on the 2021/22 socio-economic survey accessed from the World Bank data base. Households’ food security status was measured by dietary diversity score and daily calorie consumption per adult equivalence. As to econometric methodology, binomial logistic regression model was used for identifying factors affecting households’ credit access, while endogenous switching regression model was employed for examining the impact of access to credit on food security and crop productivity (yield) outcomes. The study revealed that access to credit is very low in rural Ethiopia in which only 7.2% of sample households have managed to get credit access. Moreover, the result of binomial logistic regression model indicated that age of household head, monthly income, livestock size, distance from nearest market center and access to extension services are key determinants of rural households access to credit in the study area. Results of average treatment effect indicate that access to credit significantly boosts teff and maize productivity in the study area. However, despite significantly enhancing improved seed and chemical fertilizer adoption, it is not found to have impact on food security. It emphasizes the need for complementary interventions to address broader household welfare, ensuring that agricultural gains translate into sustainable food security outcomes for rural households of Ethiopia. Key Words: Credit Access, Endogenous Switching regression, Food Security, EthiopiaItem Digital Marketing Practice and its Effect on Business Performance: An Empirical Analysis of K2n Architecture and Engineering Consultancy Plc(AAU, 2025-05-01) Kidist Tadesse; Asres A.The purpose of this study is to investigate the digital marketing practice and its effect on business performance: an empirical analysis of K2N architecture and engineering consultancy plc: The researcher uses descriptive and quantitative analysis methods. As well as, the data collected by using a well-structured questionnaire regarding the digital marketing practice and business performance by applying it to random sample of K2N members in Addis Ababa, which contained of four sub-dimensions of digital marketing (social media marketing, mobile phone marketing, website marketing and email marketing) and dependent variable business performance having 43 questions based on the systematic variation of the study variables. Although, the selected sample size consists 133 members who work in K2N as a manager, team leader, supervisor, Architect, Engineers. Finance, IT person. While the results showed that the total of the digital marketing in all of its forms effect on the business performance of the Architecture and Engineering consultancy company (as the main dimension) was perceived by the study sample to be present with a mean of 4.51 (SD=0.664) at a moderate degree. Results: The most important result was that the performance K2N architecture and engineering consultancy plc is showing a great positive result, which means that the effect of digital marketing in K2N' performance was even very good or excellent. Conclusion: The most important conclusion it’s confirmed that digital marketing in all its forms has positive effect and significant relationship with business performance of K2N. Keywords: Digital Marketing, Business Performance, Mobile Phone marketing, website marketing, social media marketing and email marketing.Item Determinants of Export Earnings in Ethiopia: a Time Series Analysis(A.A.U, 2025-06-16) Shalemu Asnake; Habtamu AdaneThis study examines the determinants of Ethiopia’s export earnings using annual time series data from the National Bank of Ethiopia (NBE) spanning 1991–2024, motivated by the country’s persistent underperformance in export earnings despite its economic potential. The research addresses the critical question: What factors explain Ethiopia’s export earnings dynamics, and how can policymakers enhance export performance to address foreign exchange shortages and drive structural transformation. The primary objective is to identify long-run and short-run determinants of export earnings to inform evidence-based policy interventions, employing Johansen cointegration and Vector Error Correction Models (VECM) to analyze relationships between export earnings and five key variables: real gross domestic product, terms of trade (ToT), trade openness, real effective exchange rate (REER), and infrastructure (proxied by real capital expenditure). Results indicate that in the long run, real gross domestic product, terms of trade, trade openness, and infrastructure significantly boost export earnings, while real effective exchange rate exerts a negative effect, reflecting competitiveness challenges from currency overvaluation. Short-run estimates align with expectations, showing positive impacts from all variables, including real effective exchange rate (consistent with the J-curve effect).Thus high and sustainable economic growth, improvements in infrastructural facilities, and maintaining a stable exchange rate policy as well as working to reduce trade constraint mechanism should be given due emphasis so as to improve Ethiopia's export earnings.