The Determinants of Export Performance in Ethiopia: A Panel Data Analysis

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Addis Ababa University


The paper examines the effect of demand and supply side factors on Ethiopia’s export performance. Thus the supply side factors are responsible for poor export performance in the country. The study employed a panel data analysis to empirically analyze these determinants in Ethiopia’sfor the period 2007 to 2017. A sample of ten major trading partners was selected to analyze the determinants of total export. Based the Hausman test fixed effect is appropriate to estimate the model for Ethiopia’s export performance. Using fixed model we found that from the supply side factors GDP, LPI, FDI and REER have insignificant effect for Ethiopia’s export performance while(CPI) institutional quality significantly affects the export performance. Whereas on the demand side the per capita income of the trading partner and trade openness significantly affect the export performance. Thus study concludes that in recent years supply side factors become insignificant for the country export performance and due emphasis should be given for supply capacity to improve the export sector.