Export Performance and Determinants in Ethiopia

Abstract In this study analysis of factors affecting export supply of Ethiopia, during the period 1981 – 2004, have been made using co integration analysis. Data trend reveals that Ethiopian export performance was highly volatile during the period, on average merchandise exports have been growing at 7% per annum, while manufacturing exports were growing at 4% per annum. The trend also reveals that Ethiopia’s export sector is mainly dominated by few primary commodities, where manufacturing exports account for less than 15% of merchandise exports on average. The two models estimated depict that merchandise export volumes are significantly influenced by gross capital formation (proxy for production capacity) and share of trade in GDP (proxy for trade liberalization) while other variables; terms of trade, real effective exchange rate, foreign income, and foreign direct investment were found to be insignificant. Manufacturing exports equation reveals an interesting result, manufacturing exports supply was found to be negatively & significantly affected by foreign income. Similar to merchandise export results, manufacturing exports were also found to be positively affected by gross capital formation. Terms of trade, real effective exchange rate, share of trade in GDP, and foreign direct investment were found to be insignificant. The study concludes with recommendations to increase share of manufactured exports and diversify export base of the country.Export Growth, Merchandise Exports, Manufacturing Exports, Error-Correction (Co-Integration) Method

Export performance of Chinese domestic firms: the role of foreign export spillovers

We investigate how the proximity to multinational exporters influences the creation of new export linkages (extensive margin of trade) by domestic firms in China. Using panel data from Chinese customs for 1997-2007, we show that domestic firms’ capacity to start exporting new varieties to new markets positively responds to the export activity of neighboring foreign firms for that same product-country pair. We find that foreign export spillovers are limited to ordinary trade activities. No foreign export spillovers are found for processing trade. More, export spillovers are stronger for sophisticated products indicating that proximity to foreign exporters may help domestic exporters to upgrade their exports. However we observe that foreign export spillovers are weaker when the technology gap between foreign and domestic firms is large, suggesting that upgrading may not occur when foreign firms have already a strong edge.export performance, spillovers, FDI, sophistication

Export performance of Chinese domestic firms: the role of foreign export spillovers

We investigate how the proximity to multinational exporters influences the creation of new export linkages (extensive margin of trade) by domestic firms in China. Using panel data from Chinese customs for 1997-2007, we show that domestic firms’ capacity to start exporting new varieties to new markets positively responds to the export activity of neighboring foreign firms for that same product-country pair. We find that foreign export spillovers are limited to ordinary trade activities. No foreign export spillovers are found for processing trade. More, export spillovers are stronger for sophisticated products indicating that proximity to foreign exporters may help domestic exporters to upgrade their exports. However we observe that foreign export spillovers are weaker when the technology gap between foreign and domestic firms is large, suggesting that upgrading may not occur when foreign firms have already a strong edge.Export performance; spillovers; FDI; Sophistication

Contractual Versus Non-Contractual Trade: The Role of Institutions in China

Recent research has demonstrated the importance of institutional quality at the country level for both the volume of trade and the ability to trade in differentiated goods that rely on contract enforcement. This paper takes advantage of cross-provincial variation in institutional quality in China, and export data that distinguishes between foreign and domestic exporters and processing versus ordinary trade, to show that institutional quality is a significant factor in determining Chinese provincial export patterns. Institutions matter more for processing trade, and more for foreign firms, just as we would expect from a greater reliance on contracts in these cases.

The Determinants of Vertical Integration in Export Processing: Theory and Evidence from China

Using detailed product-level export data for China and a variant of the Antràs and Helpman (2004) model that includes investments in component search, we examine the sectoral determinants of foreign direct investment (FDI) versus foreign outsourcing in export processing trade. We exploit the coexistence of two regulatory export processing regimes in China, which specify who owns and controls the imported components for export processing. We find that in the regime that Chinese plants own the imported components, the share of exports from vertically integrated plants is increasing in the intensity of headquarter inputs across sectors, and is decreasing in the contractibility of inputs. These results are consistent with the property- rights theory of intra-firm trade. However, in the regime that foreign firms own the imported components, no significant relationship is found between the prevalence of vertical integration, headquarter intensity and input contractibility across sectors. The positive relationship between productivity dispersion and the export share of integrated plants across sectors, as suggested by the existing literature, is found only in the regime that foreign firms own the imported components. These results are consistent with our model, which considers ownership of imported components as an alternative to asset ownership to alleviate the hold-up problem by the export-processing plant.Intrafirm trade, vertical integration, export processing, outsourcing

Trade Policies, Investment Climate,and Exports

There is a large body of research that explores international trade as a source of the dispersion in income levels and growth performances across countries. The trade liberalization policies undertaken between 1950 and 2006 led to an almost 30 fold growth in the volume of international trade. However this increase has not been homogeneous across countries. This study investigates a possible reason that prevents convergence of countries in export performance. It shows that regulatory quality, customs efficiency, quality of infrastructure, and access to finance among other factors increase export performance. Furthermore, it shows that countries that are relatively more constrained in accessing to foreign markets benefit more from improvements in investment climate than the countries with easier foreign market access. Hence attaining a favorable investment climate for private sector development should be an important policy objective for relatively closed economies to achieve convergence in export volumes with countries that have more liberal trade policies.Export performance, trade policy, investment climate, institutions, trade facilitation

Trade policies, investment climate, and exports across countries

There is a large body of research that explores international trade as a source of the dispersion in income levels and growth performances across countries. The trade liberalization policies undertaken between 1950 and 2006 led to an almost 30 fold growth in the volume of international trade. However this increase has not been homogeneous across countries. This study investigates a possible reason that prevents convergence of countries in export performance. It shows that regulatory quality, customs efficiency, quality of infrastructure, and access to finance among other factors increase export performance. Furthermore, it shows that countries that are relatively more constrained in accessing to foreign markets benefit more from improvements in investment climate than the countries with easier foreign market access. Hence obtaining a favorable investment climate for private sector development should be an important policy objective for relatively closed economies to achieve convergence in export volumes with countries that have more liberal trade policies.Free Trade,Debt Markets,Economic Theory&Research,Emerging Markets,Trade Law

Romania's integration into European markets : implications for sustainability of the current export boom

In defiance of its unimpressive track in structural reforms and relatively low foreign direct investment (FDI) inflows, Romanian exports have experienced surprisingly strong performance in both European Union (EU) and non-EU markets since 2000 after a four-year period of flat growth. While the firstphase of growth in 1992-95 can be easily explained by redirection of trade toward the EU once the state monopoly over foreign trade was abolished and other policy areas liberalized, the current second phase of export expansion raises questions concerning its drivers and sustainability. Having examined overall foreign trade performance, evolving patterns of specialization, Romania's competitiveness in EU sunrise markets, changes in factor intensities of trade with the EU, and"intra-product"trade, the authors conclude that Romania's export offer has become diversified, reflecting an impressive progress in industrial restructuring. Restructuring has been facilitated by FDI inflows, even though they appear to have been too small to generate such a big effect. Romanian firms have become increasingly part of international production networks and traditional global value chains. Sustainability of this performance depends on maintaining macroeconomic stability and keeping wage increases in line with productivity growth, as well as increasing Romania's ability to attract larger FDI inflows through improvements in business climate and trade facilitation.Economic Theory&Research,Export Competitiveness,Trade Policy,Agribusiness&Markets,Environmental Economics&Policies,Economic Theory&Research,TF054105-DONOR FUNDED OPERATION ADMINISTRATION FEE INCOME AND EXPENSE ACCOUNT,Trade Policy,Agribusiness&Markets,Environmental Economics&Policies

Interactions Between Trade Policy and Labor Market Policy and Their Effects on Development

[Excerpt] Studies of various countries show that those which have emphasized an export-led growth strategy have, in general, outperformed those which have followed an import substitution orientation. Accordingly, AID is currently focusing on export promotion as a means to stimulate economic growth and development. An effective export-led strategy requires an integrated overall policy setting. In particular, trade and foreign sector policies must be related to labor market policies. Because labor market policy might reinforce or nullify trade policy, and because labor market issues merit attention per se, AID has an interest in research on how trade policies and labor market policies interact to affect economic development. The research reported here -- primarily theoretical but also including one empirical study -- helps fill that need

Does Polish foreign trade impact employment? Empirical investigation.

Poland noted in the 90s big changes in the structure of its foreign trade turnover. Both export and import values increased in this period. Many observers claim that many jobs in Poland were lost as the result of opening of Polish economy. Undoubtedly “unemployment import” was observed in Poland. But on the other hand slowdown in Polish economy in the recent time proved that decrease of employment was relatively low in the enterprises, which have higher share of export incomes in the total incomes. This situation was observed not only in big companies but also in the most promising firms of SMEs sector. The conclusion that export is suspected to be a job creator in Poland can be drawn. According to the neoclassical Hesksher-Ohlin-Samuelson paradigm, a country characterized by the relative production factor abundance could profit from it and gain higher inflows from trade with products of high labour endowment. Reality of the 1990s supported this assumption as far as Polish export is concerned. Labour abundant products gained high importance in the export basket. There are many manufacturing sectors, which could be classified as labour abundant. The most sparkling example of profitability in export performance is furniture manufacturing. At the end of the 1990s it gained share of 8% in export basket. Additionally this sector is dominated by the firms qualified as SMEs. That is why this sector will be investigated deeply. Our study aims to calculate impact of export growth on the employment level changes in the furniture sector. The paper will be organized as follows: first chapter will be dedicated to review theoretical framework of links between foreign trade and labour market performance. Second chapter will show briefly changes in the structure of Polish foreign trade in the 1990s. The third chapter will be a short overview of labour market performance in the 1990s. In the last chapter the results from the investigation from the macro- and micro- level will be presented. In order to complete empirical part of the paper macroeconomic data will be used. As the attempt to investigate firm level data is rather rare, such a trial will be very useful for conclusions of our paper.foreign trade, international trade, Poland