Determinants of Tanzanian agricultural export: A case of cotton lint.

Abstract

This paper examines the determinants of agricultural export (cotton lint) in Tanzania using secondary data from Food and Agricultural Organization data base (FAO STAT), Ivan Kushnir's Research Center and World Economic Indicators data base from 1970 to 2010. Cointegration and error correction model were employed to analyses the determinants of cotton lint export earnings in Tanzania. The findings reveal that cotton lint export earnings are mostly determined by internal factors like real exchange rate and agricultural productivity. The results also show that the estimated coefficients of real exchange rate and agricultural earnings are statistically significant meaning that real exchange rate and agricultural productivity have positive contributions on cotton lint export earnings in Tanzania. Non parametric test also reveal that trade liberalization strategy is a significant determinant of cotton lint export earnings in Tanzania. The computed chi-squared value is greater than critical table value at 5 percent level in one degree of freedom. So the study rejected the null hypothesis of samples having the same median and favored the alternative.

Keywords: Agricultural export, determinants of agricultural export, cotton lint, Tanzania.