The Impacts of Trade Liberalization on Agricultural Export Performance of Ethiopia
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Date
2008-06
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Abstract
Developing countries have experienced extensive and rapid trade
liberalization in recent years which undertaken both in the context of
multilateral trade negotiations and as part of the conditionality linked to
the structural adjustment and stabilization programs agreed with the
international monetary fund (IMF) and the world bank (WB). The
impact of trade liberalization economic reforms on export performance
is controversial even if it is widely adopted in developing countries.
the aim of this paper is to analyze the impact of economic reform policies
on the agricultural export performance of Ethiopia; especially,
diversification, competitiveness and openness for the period 1974 to 2004.
the main question addressed here is whether the reforms made has a
positive impact on the export performance of the country; and to analyze
the relative importance of domestic supply related factors such as
diversification, competitiveness and openness as compared with external
demand conditions in determining agricultural export performance of the
country. The performance of the sector is analyzed using these four
indicator time series variables to capture the effects of both international
market potential and domestic supply side policy reforms.
the data are analyzed usmg ordinary least squares (OLS) and error
Correction Model (ECM) frameworks to examine the impact of trade
policy on the agricultural export expansion of the country both in the short
run and in the long run. The main findings of the analysis are agricultural
export performance is more sensitive to the domestic supply side policy
reforms like diversification and openness. Among them diversification is
an important factor that explains export performance both in the short run
and in the long run, indicating that the country should continue to
diversify her exports.
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Keywords
Impacts, Liberalization
Citation
A.A.U