The Determinants of Agricultural Commodity Export Performance in Ethiopia: A Dynamic Panel Data Approach
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Date
2025-01-15
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AAU
Abstract
This paper primarily aims to explore the factors affecting Ethiopian agricultural exports using a
dynamic panel data approach. The study analyzed panel data for Ethiopia’s three main
agricultural export commodities (coffee, oilseeds and fruit and vegetables) from the period
1999/2000 to 2022/23, considering factors such as data availability, export volume and export
value, among others. Moreover, the study employed the natural logarithm of each commodity’s
export value alongside determinants like previous export performance, exchange rate, consumer
price index (CPI), foreign direct investment (FDI), indirect tax revenue, and trade openness to
make interpretation of the results easy. The findings indicate that all these independent variables
significantly influence Ethiopia’s agricultural exports. Specifically, the lag agricultural exports,
exchange rates, foreign direct investment and trade openness have a positive and significant
impact, while indirect tax revenue and consumer price index negatively affect export value.
Based on these results the author recommends that the Ethiopian government should promote
tax cut incentives for exporters, reduce trade barriers on import of agricultural inputs and
subsidize agricultural inputs such as seeds, fertilizers, and equipment