Performance of Sectors’ Export and Their Effects on Economic Growth in Ethiopia: (Disaggregate Approach)

Abstract

In numerous trade theories; economist argue export orientation boosts total productivity and output growth through its sympathetic effect on the efficiency of resource allocation, capacity utilization, economies of scale and technological advancement. But some other state that the effects of export varies country to country and items to items depending on the level of development. Having these and others arguments in mind, the performance as well as the short run and long run effects of disaggregate export on Ethiopian economic growth mainly designed in advance.  To this end, the 41 years data has been collected from different sources and analyzed using both descriptive and econometric techniques. The findings of descriptive analysis reveal the performance of agriculture and service exports have been improved in amid 1992/93 and 2014/15. In particular it is portrayed that the unprecedented service export has been leading the export sector throughout post reform period. Conversely, with minor improvement; the performance industry export has been poor throughout the study period.  Likewise the result of VECM model reveals; in the long run all sectors’ export significantly affect economic growth and in the short run their individual contribution is insignificant to the economy. In sum albeit the short run contribution of each disaggregate export to economic growth is insignificant, since their donation is significant in the long run; indispensible measure should be taken to develop export in general and each disaggregate export in particular.

Key words: disaggregate export, economic growth and VECM model

JEL Code T07

DOI: 10.7176/JESD/10-11-05

Publication date:June 30^th 2019