An Empirical Analysis of Determinants of Swazilands Export Performance

Sipho V. Skosana, Francois I Kabuya

Abstract


The purpose of this study is to identify the fundamental factors that are key determinants in promoting the Swaziland export performance from 1980 to 2010. The study uses the cointegration technique to estimate both long run and short-run relationships among the variables under investigation and undertakes estimations in the error-correction model approach. The study found that foreign direct investment (FDI), world demand, and nominal exchange rate were key significant factors in determining the export performance at 1 per cent (p < 0.01) in the long run with elasticities of 0.58, 1.19 and 0.36 respectively, and at 5 per cent (p < 0.05) in the short run with coefficients of 0.26, 4.3 and 0.5, respectively. The real GDP and domestic demand have no statisticaleffect on Swazilands export performance. The error correctional model was -0.372 that captured the speed of error correction. A conducive investment environment should remain an agenda setting in the pro-trade policy making process for the Swazi policy makers.


Keywords


Cointegration; determinants; exchange rate; export; foreign direct investment

Full Text:

PDF

References


A.S. Senhadji and C.E. Montenegro. Time Series Analysis of Export Demand Equations: A

Cross-Country Analysis. IMF Staff Papers 46, pp.259-273, 1999

A.C. Jordaan and J.H. Eita. Export and Economic Growth in Namibia: A Granger Causality

Analysis.South African Journal of Economics,vol.75, pp.540-547,2007

Central Bank of Swaziland. Quarterly Review Publications. Mbabane, Swaziland, 2011

D. Gowland and C. Helm. International Economics. 1stedition London and Sydney, 1985.

H. Schenk and J. Theeuwes.Reflectionon the Position and Future of the Dutch Production Industry.

SEO Report, Amsterdam, 2002

W. Fang and S.M. Miller. Exchange Rate Depreciation and Exports: The Case of Singapore.

Economics Working Paper 2004-45, December 2004.

J. Kumar.Determinants of Export Growth in Developing Countries. Rutledge: New York, 1998.

Y. Chen, T. Liu, andW. Huo. Study on Influencing Factors of Exports in Guangdong Province in

the Context of Financial Crisis. School of Finance, University of Business and Economics, Beijing, China

M.D.Moniruzzama, M.M. Toy, and A.B. Hassan. The Export Supply of Bangladesh: An

Application of Cointegration and Vector Error Correction Approaches. International Journal of

Economics and Financial Issues 1 vol.4, pp. 163-171, 2011

R. Engle and C. W. Granger. Cointegration and Error-correction: Representation, Estimating, and

Testing. Econometrica, vol. 55, pp. 251-276, 1987

M.T.Majeed and E. Ahmad. Determinants of Exports in Developing Countries. The Pakistan

Development Review, vol.3, pp. 1265-1276, 2006.

M.VanDijk.The Determinants of Export Performance in Developing Countries: The Case of

Indonesian Manufacturing. Eindhoven Centre for Innovation Studies Working Paper 02.01. Eindhoven,

Netherlands,February 2002.

M. Holden. Exchange Rate Policy for a Small Open Economy in a World of Floating Exchange

Rates: The Case of South Africa. Occasional Paper No. 17 Economic Research Unit, University of Natal,

Durban, South Africa, 1985.

B.Sadia. Determining Import Intensity of Exports for Pakistan. RSB Research Bulletin, vol. 2,

November 2006.

R. Piontkivsky. Exchange Rate Effects on the Current Account: Would Devaluation Improve

Ukrainian Current Accounts?M.A. thesis, Economic Education and Research Consortium, University of

Ukraine, Ukraine, 1999.

A.McDowell. Polynomial Distributed Lag Models. TheStata Journal, vol. 4, pp. 180-189,

C. Carrere. Revisiting Regional Trading Agreements with Proper Specification

of the Gravity Model. European Economic Review, vol. 50, pp. 223-247, 2006

B. Pasaran, M. Hashem, and Y. Shin.An Auto Regressive Lag Modeling Approach to

CointegrationAnalysis. Centennial Volume of Ranger Frisch: Cambridge University Press, 1997

D.A. Dickey and W.A. Fuller. Distribution of the Estimation for Autoregressive Time Series with a

UnitRoot. Journal of American Statistical Association, vol. 79, pp. 355-367, 1979

D.N. Gujarati and D.C. Porter.Basic Econometrics. 3rd ed. McGraw-Hill, New York, 2009

D. Mohanan.Determinants of the Indian Machine Tools Exports. MPhil Thesis, Jawaharlal Nehru University, India, 2007

M.A.Hassan and A.H. Khan. Demand and Supply Side Factors for Export Performancein

Pakistan. The Pakistan Development Review, vol. 34, pp. 927-943, 1994

E.O. Abolagba, N.Conyekwere, B.N. Agbonkpolor and H. Umar.Determinants of Agricultural

Exports inNigeria. Journal of Human Ecology vol. 29(3), pp. 181-184, 2010


Refbacks

  • There are currently no refbacks.


 

 
  
 

 

  


About IJSBAR | Privacy PolicyTerms & Conditions | Contact Us | DisclaimerFAQs 

IJSBAR is published by (GSSRR).