Leather and leather product exports and their contribution for economic growth in Ethiopia: a time-series data analysis
Wolkite University, Economics, Ethiopia
This paper has conducted an empirical investigation of leather and leather product export and their contribution to economic growth in Ethiopia. The study employed a time series data, the period from 1984/85 to 2019/20. The data set was collected from the National Bank of Ethiopia, International Monetary Fund, Ethiopian Gumruk Commission, and World Bank. This study employed Vector Error Correction Model and Johanssen co-integration test for data analysis. The result indicates that the variables used in the study were non-stationary at level but they were found to be stationary at their first difference. The study also found that leather and leather product export, gross capital formation, and net financial flow have a positive association with economic growth and statistically significant association with economic growth in the long run. In the long run, improving leather and leather product export and net financial flow and labour force contribute to economic growth in Ethiopia. Increasing the volume of leather and leather product export and the improvement of the quality of leather products are increasing the demand of the people and improving economic growth. This finding is consistent with our objectives and research question sequences. This thesis ends with some policy recommendations. To maximise the gain from the sector the country should be cautiously allied to bordering countries, which plan and design in a sustainable way of export of leather products and pointing to escalation Ethiopian leather and leather products exports and should also increase its trading partner among African and world countries. The study mentions that the country should diversify the export of leather products by growing the variety of quality, design, and colours of the product.
Keywords: Ethiopia, economic growth, leather and leather product export, VECM
Contact Address: Amsalu Ayalew, Wolkite University, Economics, Guraghe, 07 Wolkite, Ethiopia, e-mail: amsalueco21gmail.com