Determinants of Export of Growth Rate in Ethiopia 1980-2010: Co-cointegration and Error Correction model Analysis
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Date
2012-06
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Addis Ababa University
Abstract
The study aimed at identifying the major determinants of export growth rate which have
been a matter of argument in Ethiopia and Africa as a whole for a long period of time.
The paper empirically examined the export growth rate and its major factors in the
Ethiopian context using time series data for the period 1980-2010 collected from ERCA,
NBE, UNCTAD, and WEO by employing co integration and error correction model
which is previous used by Musinguzi et al (2000) was adopted for this study.
Estimation result of the model shows that the relationship between the foreign price level,
and terms of trade with the export growth rate are positive and negative which are
statistically significant respectively. The gross domestic product also positive and
significant but it is not strong.
So the foreign price level, Terms of trade and gross domestic product appear to be major
determinants, whereas the real exchange rate and FDI have no statistically significant
effect on Ethiopia's export growth rate.
Therefore to promote the export growth rate understanding and revising of the country’s
export structure, situations and other policies related to the sector is necessary.
Keywords:
Ethiopia; export; growth rate; determinants; error correction model.
Description
Keywords
Ethiopia, export, growth rate, determinants, error correction model