Determines of the Export Trade Performance With Special Reference to Ethiopia
Year: 2025
Type: article
Abstract: This paper identified some of the main determinants of export performance in Ethiopia for the period 2010 -2016. To test empirically the relationship between export performance and its major selected determinants such as terms of trade, trade openness, gross domestic product, real effective exchange rate, domestic credit and capital expenditure over a period. The data is collected from NBE (2011), EEA Statistical data base CD-ROM (2012), WB and MoFED. The estimated results specified that exchange rate and trade liberalization significantly affect the export value of Ethiopia. The estimation technique used is error correction model and the simultaneous equation framework with Two Stage Least Square approaches (2SLS). The results from the econometric analysis revealed that all the above listed explanatory variables significantly affected export performance in the long run except capital expenditure and GDP of trading partners’ and . 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 significantly 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, However, relative price (the ratio of price of exports to domestic prices), is negatively related to the supply of export suggesting that some commodities are diverted to the domestic market as their prices increase. It can be regarded as one of the key finding in this study.
DOI: 10.20372/nadre:19038
Author: Yidnekachew Gezahagn
Language: English
Topic: Global trade and economics
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W7082641837
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