This study is conducted to investigate Ethiopian exports efficiency by using a stochastic frontier analysis model with panel data to estimate if countries operated at the frontier with its major trading partners. Export efficiency is defined as the ratio of actual exports to the maximum possible volume. In addition, the study investigates the factors of export efficiency, focusing on Ethiopia’s exports to its major trading partners during the period 2006 to 2017. The arable land, gross domestic product and population of Ethiopia and of the trade partner’s countries, distance between Ethiopia and trade partners’ countries, gross capital formation, and geographical location of trade partner’s countries determines the export flows of Ethiopian export.
As a result the estimated coefficient of determinants shows that population and gross domestic product have significantly and positively affect the Ethiopian export sector. The empirical results show that the volume of Ethiopian actual exports is far below the estimated efficient level, and that there is considerable room for increasing Ethiopia’s exports. The trend of agricultural export efficiency shows some improvement over the stated years while manufacturing sector shows decreases. Those findings imply that Ethiopia should search the redemption policy that enables the country to maximize the efficiency of the sector by using all possible potential.
TABLE OF CONTENTS
ACKNOWLEDGEMENTS
TABLE OF CONTENTS
LIST OF TABLES
LIST OF FIGURES
LIST OF APPENDICES
LIST OF ACRONYMS/ABBREVIATIONS
ABSTRACT
CHAPTER ONE
1. INTRODUCTION
1.1. Background of the Study
1.1.1. Overview of Ethiopian Export Structure and Its Performance
1.2. Statement of the Problem
1.3. Objective of the Study
1.3.1. Specific objectives of the Study
1.4. Research Questions
1.5. Hypothesis of the study
1.6. Scope of the study
1.7. Significance of the study
1.8. Limitation of study
1.9. Organization of the Paper
CHAPTER TWO
LITERATURE REVIEW
2.1. Theoretical Review
2.1.1. Mercantilist‟s View on Export
2.1.2. Classical Trade Theory and Export
2.1.3. Export as Heckscher -Ohlin Theory
2.2. Empirical Review
2.3. TRADE EFFICIENCY AND ITS DETERMINANTS
2.4 MEASUREMENT OF EXPORT EFFICIENCY
2.5. Conceptual Framework
CHAPTER THREE
METHODOLOGY OF THE STUDY
3.1. Research Approach
3.3. Research Techniques
3.4. Sample Design
3.5. Data Source and Data Type
3.6. Definitions of variables
3.7.Research Design
3.8. Model Specification
3.8.1. Model Estimation
3.9. Stochastic Frontier Analysis (SFA) Model
3.10. Export Efficiency Measurement
CHAPTER FOUR
4. DISCUSSION AND ANALYSIS
4.1. Data Discussion
4.2. Result Discussion
4.3. Trade Flows (Exports) from Ethiopia to its Major Trading Partners
4.5. Agricultural product Exports from Ethiopia to its Major Trading Partners
4.6. Manufacturing Exports from Ethiopia to its Major Trading Partners
4.6. Estimated Export Efficiency
CHAPTER FIVE
CONCLUSION AND RECOMMENDATION
5.1. CONCLUSION
5.2. RECOMMENDATION
REFERENCE
APPENDIX
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