Determinant of Trade Balance in Ethiopia: Approaches from Autoregressive Distributive Lag (ARDL) Model

Alemayehu Temesgen Befikadu

doi:doi:10.11648/j.jwer.20211002.14

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Determinant of Trade Balance in Ethiopia: Approaches from Autoregressive Distributive Lag (ARDL) Model

Alemayehu Temesgen Befikadu

Published in Journal of World Economic Research (Volume 10, Issue 2)

Received: 7 November 2021 Accepted: 24 November 2021 Published: 24 December 2021

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Abstract

The overarching purpose of this study was to use approaches from the Autoregressive Distributive Lag (ARDL) Model to uncover the causes of Ethiopia's trade balance. Ethiopia's economy was primarily reliant on earnings from the sale of primary commodities, focused on a small number of export commodities and market outlays to finance the importation of desperately needed capital goods. As a result, the country's exports failed, resulting in a persistent trade imbalance in international trade. As a result, the study concentrated on the key determinants of Ethiopia's trade balance, including the structure, value, volume, and direction of Ethiopia's export and import. The bound testing approach of Johansson co-integration test and error correction model was developed within the autoregressive distributed lag (ARDL) model framework, and annual data for the period 1990 to 2020 was used to investigate whether a short run and long run relationship exists between trade balance and its determinants. The main purpose of this paper was to show that lnFEA might show long-run negative and short-run positive trade balance relationships. lag trade balance, on the other hand, has a short-term positive relationship with trade balance, but REER has a long-term and short-term negative relationship with trade balance.

Published in	Journal of World Economic Research (Volume 10, Issue 2)
DOI	10.11648/j.jwer.20211002.14
Page(s)	62-73
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2021. Published by Science Publishing Group

Keywords

ARDL, Economic Growth, Export, Import, Trade Balance

References

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Alemayehu Temesgen Befikadu. (2021). Determinant of Trade Balance in Ethiopia: Approaches from Autoregressive Distributive Lag (ARDL) Model. Journal of World Economic Research, 10(2), 62-73. https://doi.org/10.11648/j.jwer.20211002.14

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ACS Style

Alemayehu Temesgen Befikadu. Determinant of Trade Balance in Ethiopia: Approaches from Autoregressive Distributive Lag (ARDL) Model. J. World Econ. Res. 2021, 10(2), 62-73. doi: 10.11648/j.jwer.20211002.14

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AMA Style

Alemayehu Temesgen Befikadu. Determinant of Trade Balance in Ethiopia: Approaches from Autoregressive Distributive Lag (ARDL) Model. J World Econ Res. 2021;10(2):62-73. doi: 10.11648/j.jwer.20211002.14

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@article{10.11648/j.jwer.20211002.14,
  author = {Alemayehu Temesgen Befikadu},
  title = {Determinant of Trade Balance in Ethiopia: Approaches from Autoregressive Distributive Lag (ARDL) Model},
  journal = {Journal of World Economic Research},
  volume = {10},
  number = {2},
  pages = {62-73},
  doi = {10.11648/j.jwer.20211002.14},
  url = {https://doi.org/10.11648/j.jwer.20211002.14},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jwer.20211002.14},
  abstract = {The overarching purpose of this study was to use approaches from the Autoregressive Distributive Lag (ARDL) Model to uncover the causes of Ethiopia's trade balance. Ethiopia's economy was primarily reliant on earnings from the sale of primary commodities, focused on a small number of export commodities and market outlays to finance the importation of desperately needed capital goods. As a result, the country's exports failed, resulting in a persistent trade imbalance in international trade. As a result, the study concentrated on the key determinants of Ethiopia's trade balance, including the structure, value, volume, and direction of Ethiopia's export and import. The bound testing approach of Johansson co-integration test and error correction model was developed within the autoregressive distributed lag (ARDL) model framework, and annual data for the period 1990 to 2020 was used to investigate whether a short run and long run relationship exists between trade balance and its determinants. The main purpose of this paper was to show that lnFEA might show long-run negative and short-run positive trade balance relationships. lag trade balance, on the other hand, has a short-term positive relationship with trade balance, but REER has a long-term and short-term negative relationship with trade balance.},
 year = {2021}
}

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TY  - JOUR
T1  - Determinant of Trade Balance in Ethiopia: Approaches from Autoregressive Distributive Lag (ARDL) Model
AU  - Alemayehu Temesgen Befikadu
Y1  - 2021/12/24
PY  - 2021
N1  - https://doi.org/10.11648/j.jwer.20211002.14
DO  - 10.11648/j.jwer.20211002.14
T2  - Journal of World Economic Research
JF  - Journal of World Economic Research
JO  - Journal of World Economic Research
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EP  - 73
PB  - Science Publishing Group
SN  - 2328-7748
UR  - https://doi.org/10.11648/j.jwer.20211002.14
AB  - The overarching purpose of this study was to use approaches from the Autoregressive Distributive Lag (ARDL) Model to uncover the causes of Ethiopia's trade balance. Ethiopia's economy was primarily reliant on earnings from the sale of primary commodities, focused on a small number of export commodities and market outlays to finance the importation of desperately needed capital goods. As a result, the country's exports failed, resulting in a persistent trade imbalance in international trade. As a result, the study concentrated on the key determinants of Ethiopia's trade balance, including the structure, value, volume, and direction of Ethiopia's export and import. The bound testing approach of Johansson co-integration test and error correction model was developed within the autoregressive distributed lag (ARDL) model framework, and annual data for the period 1990 to 2020 was used to investigate whether a short run and long run relationship exists between trade balance and its determinants. The main purpose of this paper was to show that lnFEA might show long-run negative and short-run positive trade balance relationships. lag trade balance, on the other hand, has a short-term positive relationship with trade balance, but REER has a long-term and short-term negative relationship with trade balance.
VL  - 10
IS  - 2
ER  -

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Author Information

Alemayehu Temesgen Befikadu

Department of Economics, Ambo University, Ambo, Ethiopia

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Plain Text BibTeX RIS

APA Style

Alemayehu Temesgen Befikadu. (2021). Determinant of Trade Balance in Ethiopia: Approaches from Autoregressive Distributive Lag (ARDL) Model. Journal of World Economic Research, 10(2), 62-73. https://doi.org/10.11648/j.jwer.20211002.14

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ACS Style

Alemayehu Temesgen Befikadu. Determinant of Trade Balance in Ethiopia: Approaches from Autoregressive Distributive Lag (ARDL) Model. J. World Econ. Res. 2021, 10(2), 62-73. doi: 10.11648/j.jwer.20211002.14

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AMA Style

Alemayehu Temesgen Befikadu. Determinant of Trade Balance in Ethiopia: Approaches from Autoregressive Distributive Lag (ARDL) Model. J World Econ Res. 2021;10(2):62-73. doi: 10.11648/j.jwer.20211002.14

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@article{10.11648/j.jwer.20211002.14,
  author = {Alemayehu Temesgen Befikadu},
  title = {Determinant of Trade Balance in Ethiopia: Approaches from Autoregressive Distributive Lag (ARDL) Model},
  journal = {Journal of World Economic Research},
  volume = {10},
  number = {2},
  pages = {62-73},
  doi = {10.11648/j.jwer.20211002.14},
  url = {https://doi.org/10.11648/j.jwer.20211002.14},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jwer.20211002.14},
  abstract = {The overarching purpose of this study was to use approaches from the Autoregressive Distributive Lag (ARDL) Model to uncover the causes of Ethiopia's trade balance. Ethiopia's economy was primarily reliant on earnings from the sale of primary commodities, focused on a small number of export commodities and market outlays to finance the importation of desperately needed capital goods. As a result, the country's exports failed, resulting in a persistent trade imbalance in international trade. As a result, the study concentrated on the key determinants of Ethiopia's trade balance, including the structure, value, volume, and direction of Ethiopia's export and import. The bound testing approach of Johansson co-integration test and error correction model was developed within the autoregressive distributed lag (ARDL) model framework, and annual data for the period 1990 to 2020 was used to investigate whether a short run and long run relationship exists between trade balance and its determinants. The main purpose of this paper was to show that lnFEA might show long-run negative and short-run positive trade balance relationships. lag trade balance, on the other hand, has a short-term positive relationship with trade balance, but REER has a long-term and short-term negative relationship with trade balance.},
 year = {2021}
}

Copy | Download

TY  - JOUR
T1  - Determinant of Trade Balance in Ethiopia: Approaches from Autoregressive Distributive Lag (ARDL) Model
AU  - Alemayehu Temesgen Befikadu
Y1  - 2021/12/24
PY  - 2021
N1  - https://doi.org/10.11648/j.jwer.20211002.14
DO  - 10.11648/j.jwer.20211002.14
T2  - Journal of World Economic Research
JF  - Journal of World Economic Research
JO  - Journal of World Economic Research
SP  - 62
EP  - 73
PB  - Science Publishing Group
SN  - 2328-7748
UR  - https://doi.org/10.11648/j.jwer.20211002.14
AB  - The overarching purpose of this study was to use approaches from the Autoregressive Distributive Lag (ARDL) Model to uncover the causes of Ethiopia's trade balance. Ethiopia's economy was primarily reliant on earnings from the sale of primary commodities, focused on a small number of export commodities and market outlays to finance the importation of desperately needed capital goods. As a result, the country's exports failed, resulting in a persistent trade imbalance in international trade. As a result, the study concentrated on the key determinants of Ethiopia's trade balance, including the structure, value, volume, and direction of Ethiopia's export and import. The bound testing approach of Johansson co-integration test and error correction model was developed within the autoregressive distributed lag (ARDL) model framework, and annual data for the period 1990 to 2020 was used to investigate whether a short run and long run relationship exists between trade balance and its determinants. The main purpose of this paper was to show that lnFEA might show long-run negative and short-run positive trade balance relationships. lag trade balance, on the other hand, has a short-term positive relationship with trade balance, but REER has a long-term and short-term negative relationship with trade balance.
VL  - 10
IS  - 2
ER  -

Copy | Download