A Dynamic Panel Gravity Model Application on the Determinant Factors of Ethiopia’s Coffee Export Performance

Wondesen Teshome Bekele () and Fekadu Gelaw Mersha ()
Additional contact information
Wondesen Teshome Bekele: Dire Dawa University
Fekadu Gelaw Mersha: Haramaya University

Annals of Data Science, 2019, vol. 6, issue 4, No 8, 787-806

Abstract: Abstract Ethiopia’s coffee export earning percentage share in the total export has been rapidly waning over the last decades while it is the first commodity in currency grossing of the country. Since, this study analyses the determinant factors of Ethiopia’s coffee exports (ECE) performance, in the dimension of export sales, via a more realistic model application, dynamic panel gravity model. It commences with the disintegration of the determinant into supply- and demand-side factors. It used short panel data that comprise 71 countries of consistent Ethiopia’s coffee importers for the period of 11 years from 2005 to 2015. The panel unit root test of Harris–Tzavalis was made for each variable and applied the first difference transformation for the variables that had a unit root. The system model of a linear dynamic panel gravity model was specified and estimated with two-step general method moment estimation approach. The model results suggested that lagged ECE performance, real gross domestic product (GDP) of importing countries, Ethiopian population, Ethiopian real GDP, openness to trade of importing countries, Ethiopian institutional quality, and weighted distance were found to be the determinant factors of Ethiopia’s coffee exports performance. The study also implied policies that would promote institutional quality or permits favorable market environments, supply capacity, trade liberalization, and destination with relatively cheaper transportation costs in order to progress Ethiopia’s coffee exports performance.

Keywords: Coffee exports; Dynamic panel model; Ethiopia; Gravity model; System model; Two-step GMM (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
http://link.springer.com/10.1007/s40745-019-00198-4 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:aodasc:v:6:y:2019:i:4:d:10.1007_s40745-019-00198-4

Ordering information: This journal article can be ordered from
https://www.springer ... gement/journal/40745

DOI: 10.1007/s40745-019-00198-4

Access Statistics for this article

Annals of Data Science is currently edited by Yong Shi

More articles in Annals of Data Science from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().