EconPapers    
Economics at your fingertips  
 

The Effect of Everything But Arms Trade Preference on the Exports of Ethiopia: Empirical Evidence Using Gravity Model

Getaneh Mihret Ayele

Ethiopian Journal of Economics, 2021, vol. 30, issue 02

Abstract: International trade is generally considered as an integral part of growth and development effort of an economy. Granting non-reciprocal trade preferences to developing countries has been a common practice by developed countries in their foreign trade policy. Many developing countries have also participated in reciprocal regional trade agreements. This study examined the effect of Everything-But-Arms trade preference on the exports of Ethiopia using bilateral export data with 34 major trade partners including the EU-15 over the period 2001-2019. The random effect model was used to estimate the generalized gravity model. The estimation results revealed that the EU non-reciprocal trade preference to the least developed countries, which is EBA dummy, has a negative and significant effect on the export performance of Ethiopia. The country’s exports generally improve for a higher domestic production and trade partner’s income, but decrease for a higher trade partners’ population size, a longer geographic distance and common language sharing with trading partners. Thus, the country should work on easing domestic supply-side trade bottlenecks and promoting export diversification through auspicious investment climate for export-oriented value-added economic activities. This could help to ensure long-run global competitiveness and to effectively reap the trade opportunities of non-reciprocal trade preferences from developed economies, the EU in particular.

Keywords: International; Relations/Trade (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://ageconsearch.umn.edu/record/343252/files/T ... t%20Arms%20Trade.pdf (application/pdf)

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:ags:eeaeje:343252

DOI: 10.22004/ag.econ.343252

Access Statistics for this article

More articles in Ethiopian Journal of Economics from Ethiopian Economics Association Contact information at EDIRC.
Bibliographic data for series maintained by AgEcon Search ().

 
Page updated 2025-03-19
Handle: RePEc:ags:eeaeje:343252