Multivariate Time Series Analisis of Export of Ethiopian Livestock Products

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Addis Ababa University


Ethiopia has one of the largest livestock populations in Africa. The study is aimed to fit a multivariate time series model which explains the cointegration of Ethiopian livestock products export using vector auto regression (VAR) and vector error correction (VEC) model. Secondary data on exports of livestock products export first quarter of 2002 to the third quarter of 2017, which is obtained from national bank of Ethiopia, is used. Unit root tests of the series under study revealed that all the series are non-stationary at level and stationary after first difference; all the series are not affected by periodicity. The result of Johansen test indicates the existence of one cointegration relation between the volume of live animals, meat and leather export and there is long-term dynamics between these exports of Ethiopian livestock products. From the error correction model result, about 18.1 percent of disequilibrium in the volume of live animals export is corrected each quarter. Exchange rate has negative and significant elasticity on the volume of leather export. Furthermore, the volume of meat export is not affected by exchange rate. The empirical finding of this study recommend concerned bodies to give due attention to exchange rate in policy formulation.



Ethiopian Livestock Market, Significance of the Study, Export of Ethiopian Livestock Products