Ethiopian Export Efficiency. A Stochastic Frontier Analysis Approach

Table of Contents

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

2. 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

3. 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

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

5. CONCLUSION AND RECOMMENDATION

5.1. CONCLUSION

5.2. RECOMMENDATION

Research Objectives & Key Focus Areas

The primary objective of this thesis is to evaluate the export efficiency of Ethiopia over the period 2006–2017. By analyzing trade relations with 49 major partner countries, the study seeks to determine the gap between current export performance and potential trade capacity, while identifying key determinants of this efficiency using a Stochastic Frontier Analysis (SFA) model.

• Application of the Stochastic Frontier Analysis (SFA) model to estimate trade frontiers.
• Evaluation of export performance across agricultural and manufacturing sectors.
• Identification of determinants such as GDP, population, distance, and infrastructure.
• Assessment of the impact of trade policy and market constraints on export efficiency.

Excerpt from the Book

Summary of Chapters

1. INTRODUCTION: Outlines the background of the Ethiopian export sector, identifies the problem of export instability, and establishes the study's research objectives and scope.

2. LITERATURE REVIEW: Examines theoretical foundations including Mercantilism, Classical Trade Theory, and Heckscher-Ohlin theory, alongside empirical reviews of trade efficiency studies.

3. METHODOLOGY OF THE STUDY: Details the research design, data sources, and the application of the Stochastic Frontier Analysis (SFA) model to measure export potential and efficiency.

4. DISCUSSION AND ANALYSIS: Presents the empirical data and results, discussing export flows and estimated efficiencies for both agricultural and manufacturing sectors.

5. CONCLUSION AND RECOMMENDATION: Summarizes the findings regarding export efficiency gaps and provides policy recommendations to enhance future export performance.

Key Words

Export, Export Efficiency, Stochastic Frontier Analysis, Gravity Model, Ethiopian Economy, Trade Determinants, Agricultural Exports, Manufacturing Exports, Trade Potential, Panel Data, Trade Policy, Market Access, Export Diversification, Foreign Currency, Economic Growth.

Frequently Asked Questions

What is the core focus of this research?

This research evaluates the export efficiency of Ethiopia by comparing its actual trade volumes with its potential trade capacity across 49 major trading partners between 2006 and 2017.

What are the primary sectors examined in this study?

The study specifically investigates the agricultural product sector and the manufacturing commodities sector.

What is the main research objective?

The main objective is to determine if Ethiopia's export sector operates at its theoretical maximum potential (frontier) and to identify the factors that contribute to export efficiency or inefficiency.

Which scientific method is utilized?

The study employs a Stochastic Frontier Analysis (SFA) model combined with a stochastic gravity model to estimate trade frontiers and measure technical efficiency.

What does the main body cover?

The main body covers a review of trade theories, a detailed methodology using econometric techniques, an analysis of trade flows, and an assessment of export efficiency results for the agricultural and manufacturing sectors.

Which keywords characterize this work?

Key terms include export efficiency, Stochastic Frontier Analysis, trade determinants, Ethiopian economy, and trade potential.

How does Ethiopia's manufacturing export efficiency compare to the frontier?

The findings indicate that manufacturing export efficiency is significantly below the potential frontier, with most trading partner efficiency scores falling below 50%.

What is the significance of the "behind border" constraints mentioned?

These constraints represent man-made barriers to trade, such as infrastructure limitations, which prevent the country from achieving its maximum potential export volume.