Modeling the Determinants of Ethiopia's Trade Flow: A Gravity Approach
| dc.contributor.advisor | Girma, Estiphanos (Dr.) | |
| dc.contributor.author | Mulugeta, Ayehu Asnake | |
| dc.date.accessioned | 2021-02-21T08:24:21Z | |
| dc.date.accessioned | 2023-11-04T10:28:30Z | |
| dc.date.available | 2021-02-21T08:24:21Z | |
| dc.date.available | 2023-11-04T10:28:30Z | |
| dc.date.issued | 2009-06 | |
| dc.description.abstract | In this paper we have attempted to analyze the determinants of Ethiopia 50 trade flow with its major trading partners using the gravity model. We used panel data estimation technique. The pre estimation Hausman specification test shows that fixed effect is favoured for both export and import models. Moreover, both the theoretical fi-amework and Hausman test for endogeneity shows domestic GDP is endogenous in the export model. Therefore, instrumental variable estimation is used to estimate the export model wh1ie GLS is used for import model estimation. Post specification results show the major determinants of Ethiopia 50 export are domestic per capita GDP, trading partners per capita GDP, distance, trading partners trade policy, domestic infi-astructure, and domestic institutional quality. All these detelwinants affect export positively while distance has a negative effect. The results also revealed that the major determinants of Ethiopia:S· import are home GDP, partners GDP, and home institutional quality. Among the basic gravity variables GDP works well in explaining import but not distance. The other most important finding is that variables that can be reflected in prices are little to W01* 1n determimng import. The insignificant exchange rate and distance variables are examples for this. In general, the study implies strong 1nstitutions, better infi-astructure and liberalized [rade policies are required so as to integrate the country with the rest of the world and thereby benefit fi-om trade. | en_US |
| dc.identifier.uri | http://etd.aau.edu.et/handle/123456789/25167 | |
| dc.language.iso | en | en_US |
| dc.publisher | A.A.U. | en_US |
| dc.subject | Words: Gravity Model, Trade flo w, Pan el Data, Fixed Effect Model | en_US |
| dc.title | Modeling the Determinants of Ethiopia's Trade Flow: A Gravity Approach | en_US |
| dc.type | Thesis | en_US |