What Determines the Export Performance of Ethiopia: A Time Series Analysis
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Date
2013-11
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Addis Ababa University
Abstract
This paper identified some of the main determinants of export performance in Ethiopia for the period 1974-2011.To test empirically the relationship between export performance and its major selected deter-minants such as terms of trade, trade openness, gross domestic product, real effective exchange rate, do-mestic credit and capital expenditure over a period.
The results from the econometric analysis revealed that all the above listed explanatory variables signifi-cantly affected export performance in the long run except capital expenditure. In the short run, terms of trade became insignificant and negative in sign which was unexpected. Capital expenditure was also in-significant like in the case of long run. However, except these two variables other variables were found to significantly affect the export performance of the country. On the other hand, out of the variables signifi-cantly affected export both in the long run and short run; terms of trade, trade openness, and real gross domestic product affected export positively as expected. Especially when we look at the magnitude by which trade openness affected the dependent variable both in the long run and in the short run positively and significantly, it can be regarded as one of the key finding in this study.
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Export Performance of Ethiopia