Determinants of Agricultural Export in Ethiopia
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Date
2012-06
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Addis Ababa University
Abstract
This paper identified some of the main determinants of agricultural export in Ethiopia for
the period 1980-2010. To test empirically the relationship between agricultural export
performance and its major selected determinants such as terms of trade, gross domestic
product, domestic price, world price, kilometers paved roads and fertilizer input import
over a period; cointegration and error correction approaches in the regression analysis
were used.
The results from the cointegration and error correction models revealed that all the above
listed explanatory variables significantly affected agricultural export performance in the
long run except domestic price. In the short run, gross domestic product (GDP) became
insignificant and negative in sign which was unexpected. Domestic price was also
insignificant like in the case of long run. However, except these two variables other
variables were found to significantly affect the agricultural export performance of the
country. On the other hand, out of the variables significantly affected agricultural export
both in the long run and short run; terms of trade, world price, fertilizer input import over
a period and kilometers of paved roads affected agricultural export positively as
expected. Especially when we look at the magnitude by which kilometers of paved road
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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Agricultural Export in Ethiopia