The Determinate of Agricultural Export in Ethiopia: An Error Correction Modle and Cointegration Approach

Abstract

This paper identified some of the main determinants of agricultural export in Ethiopia for The period 1993-2013. To test empirically the relationship between agricultural export performance and its major selected determinants such as real gross domestic product, real effective exchange rate, fertilizer input, trade openness, institutional quality and export diversification; cointegration and error correction approaches in the regression analysis were used. The results from the cointegration and error correction models revealed that real GDP, fertilizer input and export diversification are significantly affected agricultural export performance in the long run except real effective exchange rate, trade openness and institutional quality. In the short run, real gross domestic product (RGDP), real effective exchange rate, and export diversification became significant. On the other hand, out of the variables significantly affected agricultural export both in the long run and short run; real GDP and export diversification affected agricultural export positively as expected.

DOI: 10.7176/JESD/11-3-05

Publication date: February 29^th 2020