Determinants of Agricultural Product Export: Evidence from a Panel Data Analysis of East African Countries
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Date
2020-06
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A.A.U
Abstract
This paper investigates the determinants of agricultural product export in east African countries. Due to the limitation of data availability, only 12 East African countries and 19 years, (2000-2018) macroeconomic data were considered. A secondary data source was used and the necessary data were collected from the World Bank Development Indicator and UNICTAD baseline data. The thesis attempts to explain theoretically and assess empirically climate change and the other factors affecting agricultural export of east African countries. Specifically, the study focuses on analyzing the relative importance of climate change and the two major factors in determining the countries agricultural export performance. A Linear panel data Model was employed for the analysis. The selection test result confirmed that fixed effect to be an appropriate model for the analysis. The estimation result shows that the effect of climate change and real effective exchange rate, on agricultural products from east African countries is negative and significant. Moreover, on the supply side, factors such as real GDP, trade openness, and FDI of exporting country is positively and significantly affects agricultural export. The study also indicates that on the demand side the effect of per capita GDP of the US is positive and significant. Therefore, The study advocates that policy makers of east African country; the government should take a remedial action for climate change problem through allocate sufficient annual budget to combat the problem with a serious supervise and policymakers should give equal emphasis for demand and supply side determinants of agricultural export, indirectly affects the export potential utilization.
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Agricultural Product Export