Economic Impact and Determinants of Export: The Case of Ethiopian Textile and Apparel Industry
No Thumbnail Available
Date
2010-06
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
A.A.U
Abstract
Ethiopian indu strial development policy has put the textile and appa rel ind ustry on the
forefront position to acce lerate the country's indu stri ali zation process. The avail abili ty of
huge labour fo rce, the utili zation of abundant raw material , the growin g demand of this
industry's product (as the bas ic human need) and the intern ational goodwill to prov ide
prefe rent ia l and differential market access to this industry help the sector to pl ay a
significant ro le on the development of the co untry's economy and on miti gation of
poverty. This paper examines the economic impact of texti le and apparel in dustry, the
utili zation of preferential and differential market access and the determinants of the
export performance.
The desc riptive anal ys is covers the period 1999 to 2009. The result of the descript ive
analys is reveals that the economic impact and the preferenti al market utili zation of the
textil e and apparel indu stry are very limited. The time seri es econometri c analysis
covering the period 197 1172 to 2008109 employed Eviews 5 (a computer program as a
tool for econometric analys is). The econometri c analys is result shows that labour cost
and trade openn ess (liberali zat ion) have pos itive impact on the export performance of the
sector, whereas cotton export and exchange rate have negative impact.
As this study tries to indi cate, the governm ent supports onl y those who engage
themselves on export market. However, this is not sati sfactory and success ful for the
sector's development. So one of the major conclu sions of this study is that unl ess the
go vernment rev ises its poli cy direction towards developing and supporting the sector
(boost the sector in vestments), th e current "a rtifi cial" export growth of the indu stry will
be short-li ved and ult imately results in unsustainable export growth.
Description
Keywords
Economic Impact and Determinants of Export