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Export Survival of Manufacturing Firms in Ethiopia:Empirical Evidence

Author

Listed:
  • Tsadkan Araya, Gebreyesus
  • Cherkos Meaza, Gebregergis
Abstract
This study used panel data for manufacturing firms from 2006 to 2016 to analyze the patterns and determinants of export survival of exporting firms in Ethiopia. The empirical investigation has two parts: non-parametric and semi-parametric methods. The non-parametric method analyzes the survivor function and the hazard (exit) rate of firms on the whole sample and by groups, while the semi-parametric analyzes a regression outputs based on the discrete-time model of proportional hazard model. The result from the survivor function analysis shows that, at the end of the study period, the number of firms that survive in export market are more than 50%. Moreover, the result of the hazard rate reveals as the duration of time increases, the rate at which firms exit the export market decreases sharply. With regard to our semi-parametric analyses, we examine the factors that affect survival of manufacturing firms in international market and observed the direction of the impacts they have on the survival rates. The findings show that large and medium firms, firms that have higher productivity, export oriented firms, private owned enterprises, firms located in textile and garment industries, firms located outside Addis Ababa and firms categorized as importers have higher probability of staying in export markets than the others.

Suggested Citation

  • Tsadkan Araya, Gebreyesus & Cherkos Meaza, Gebregergis, 2018. "Export Survival of Manufacturing Firms in Ethiopia:Empirical Evidence," MPRA Paper 85348, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:85348
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    File URL: https://mpra.ub.uni-muenchen.de/85348/1/MPRA_paper_85348.pdf
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    References listed on IDEAS

    as
    1. Besedes, Tibor & Prusa, Thomas J., 2006. "Product differentiation and duration of US import trade," Journal of International Economics, Elsevier, vol. 70(2), pages 339-358, December.
    2. Paul Brenton & Christian Saborowski & Erik von Uexkull, 2014. "What Explains the Low Survival Rate of Developing Country Export Flows?," World Scientific Book Chapters, in: INTERNATIONAL TRADE, DISTRIBUTION AND DEVELOPMENT Empirical Studies of Trade Policies, chapter 17, pages 347-372, World Scientific Publishing Co. Pte. Ltd..
    3. Cadot, Olivier & Iacovone, Leonardo & Pierola, Martha Denisse & Rauch, Ferdinand, 2013. "Success and failure of African exporters," Journal of Development Economics, Elsevier, vol. 101(C), pages 284-296.
    4. Arne Bigsten & Mulu Gebreeyesus, 2009. "Firm Productivity and Exports: Evidence from Ethiopian Manufacturing," Journal of Development Studies, Taylor & Francis Journals, vol. 45(10), pages 1594-1614.
    5. Hess, Wolfgang & Persson, Maria, 2010. "The Duration of Trade Revisited: Continuous-Time vs. Discrete-Time Hazards," Working Paper Series 829, Research Institute of Industrial Economics.
    6. S.M. Shafaeddin, 2005. "Trade Liberalization And Economic Reform In Developing Countries: Structural Change Or De-Industrialization?," UNCTAD Discussion Papers 179, United Nations Conference on Trade and Development.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Export survival; Cox-model; Ethiopia;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F18 - International Economics - - Trade - - - Trade and Environment
    • L6 - Industrial Organization - - Industry Studies: Manufacturing
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • Y4 - Miscellaneous Categories - - Dissertations

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