Domestic Market Structure and Export Performance: Case of the Ethiopian Leather Industry
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Date
2011-06
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Addis Ababa University
Abstract
This paper examines domestic market structure and export performance in Ethiopian leather industry manufactures from the perspective of recent developments in international trade theory, while bringing the trends of concentration level in the sector in to the analysis. Studies on the
determinants of export performance in Ethiopia manufacturing industries in general and leather industry in particular focused on the macroeconomic and controllable variables of the firms to the performance of the industries in international market. The microeconomic and uncontrollable determinants of export performance have received negligible research attention. In this study, the author examines one key uncontrollable/ external factor, namely, local industry concentration, in the context of Ethiopian leather industry. In addition, the author conduct interview with Ethiopian Leather Industries Association and Leather Industry Development Institute to capture other
factors that constraint and influence the competitiveness of Ethiopian leather industry firms in the global market. This study evaluates the effect of leather industry domestic market structure on export performance using descriptive analysis for the period 1998-2009. Central Statistical Agency 2009
statistical survey report on 80 large and medium scale manufacturing firms selected for the study and the market structure and the likelihood of competition assessed by using measures of seller concentration and then its correlation to export revenue examined. On the basis of empirical analysis, the author finds that local market concentration is potent predictor of Ethiopian leather industry firms' export revenue. The author discusses the implication of the finding to expose the reason behind the success of Ethiopian leather and leather products exporters in international markets.
Keywords: ETHIOPIA; EXPORT REVENUE; LEATHER INDUSTRY; MARKET STRUCTURE
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Keywords
Ethiopia, Export Revenue, Leather Industry, Market Structure