The Export Performance of the Sri Lankan Tea: An Econometric Analysis

M. W. A. De Silva and N. S. Cooray
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M. W. A. De Silva: Department of Decision Sciences, Faculty of Management Studies & Commerce, University of Sri Jayewardenepura, Colombo, Sri Lanka
N. S. Cooray: Graduate School of International Relations (GSIR), International University of Japan, 777 Kokusai-Cho, Minami Uonuma-Shi, Niigata 949-7277, Japan

International Journal of Research and Innovation in Social Science, 2022, vol. 6, issue 4, 224-227

Abstract: Sri Lanka is the fourth-largest tea producer and the world’s third-biggest tea exporter. It is vital to investigate why Sri Lanka lost her second place as an exporter of tea and how she can regain this status. Current research fills the literature gap by exploring the tea export industry. The current research uses time-series data from 1989 to 2020, and the time-series properties were evaluated using the ADF unit root test. The Autoregressive Distributed Lag (ARDL) Model looked at the long-run and short-run relationship between variables. The ARDL bound test showed that tea export is cointegrated with the other three variables (tea production, real exchange rates, and foreign exchange earnings). When considered, the foreign income has a substantial long-run and short-run influence on tea exports, whereas real exchange rates suggest only significant short-run effects. Total tea production serves as a supply constraint and has a significant long-run effect, while one-period lag tea production has a significant short-run impact. This study recommends that policymakers ensure an export quality tea production to acquire a place before on the global export market.

Date: 2022
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