The Determinants of the Export Competitiveness of the Coffee Industry in Ethiopia
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Date
2018-05-14
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Addis Ababa University
Abstract
The general objective of the study is to examine the export competitiveness and determinants of export performance of Ethiopian coffee sector. In analyzing competitiveness of the country in its exports of coffee, a data from UNCTAD-ITC is used for the periods 1991-2016. The Revealed Comparative Advantage (RCA) and Revealed Symmetric Comparative Advantage (RSCA) measures of competitiveness were used for the analysis. Furthermore, a multiple regression (OLS model) is also employed to investigate the determinants of coffee export competitiveness and performance as well. Results for the RCA and RSCA showed that Ethiopia has comparative advantage in exports of coffee. The regression analysis revealed domestic consumption level of coffee affects the export competitiveness of the product adversely and this relationship is statistically significant. Other variables including domestic production level, world price of coffee, exchange rate and export volume are found to affect the export competitiveness positively and the effect is significant. Though domestic producer price affects the export performance of the sector positively, the effect is statistically insignificant. The country should consider measures to address current inefficiencies in the supply side, management of price risk which are resulted from the volatile nature of both domestic and international coffee prices, quality improvement and illegal trade.
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Keywords
Coffee, Competitiveness, Export