Export Competitiveness Efects on Economic Growth of East African Community.pdf

1、Export competitiveness, seems like an objective concept, but it remainsconceptually and empirically hard to comprehend.With the gradual reduction intrade barriers, stressing on export-led growth strategy by nations, more

2、 emphasisis now on export competitiveness since the world today has become a globalvillage, greatly due to globalization.Once a country open up to the world, it isinviting other countries' products which may be superior

3、in terms of quality, lowprices and in terms of variety to the domestic products.For a countries industryto survive and thrive, competition with other industries is inevitable.In so doing,the industries bring about innova

4、tions, increased productivity hence increasedincome leading to economic growth.
　　 This paper presents a distinct way of thinking about export competitivenessand attempts to explain it empirically for EAC nations.Fir

5、st, two data sets areconstructed: First, an indepth Exports analysis through RCA and related indices.Competitiveness of major exports commodities have been analyzed through aRevealed Comparative Advantage (RCA), Revealed

6、 symmetric advantage(RSCA) and the Net Trade Reveal Comparative advantage (NTRCA) to measureexport competitiveness of EAC exports.Secondly, an annual panel dataset toregress the above competitive exports with GDP has bee

7、n used to determine theeffect of Export competitiveness on the small open economies of leastdeveloping Countries of EAC.
　　 EAC exportsare still dominated by primary agricultural products.Theseexports are disaggregat

8、ed into two distinctive categories: Exports of Coffee andtea (selected overall competitive exports from RCA analysis) and OTHERexports of goods and services, which is the residual of exports after removingexports of coff

9、ee and tea.
　　 For the two categories of exports, an empirical model has been specified thatincorporate GDP (as a proxy for economic growth and welfare change, additionalvariables include Capital, and Labor competiti

10、ve exports of coffee and tea(comparative and concentrated), competitive Otherexports, Import price index,export price index, terms of trade, trade openness, gross capital formation,Literacy rate, CPIA and exchange rate ,

11、 using FEM regression analysis onbalanced panel data for Five countries of EAC: Burundi, Kenya, Rwanda,Tanzania and Uganda with GDP to determine exports competitiveness effects onEAC economies.
　　 Results from FEM re

12、gression analysis are that the variables of competitivecoffee and tea, capital, labor and Literacy rate are significant and positivelycorrelated to GDP; other variables are insignificant.Conclusion is that, theimpacts of

13、 exports category of Coffee and tea on GDP is minute but significant.It supports that capital and labor, control variable of literacy rate havesignificant impact on GDP than that of other exports of goods and the otherva

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