Determinants of Export Growth in Sub – Saharan African Countries

Abstract

The research examines the main determinants factors of export performance of Sub-Saharan Africa countries. Mainly, the study focuses on analyzing the time and country specific fixed effects and relative importance of the two major factors (supply and demand side) determining factors of Sub-Saran African countries’ export performance. The study employed balanced Panel data sets which were collected from World Bank and IMF. Based on the houseman test result, the study used fixed effect estimation techniques in order to investigate these determinant factors. The data covers a period of 30 years (1987 to 2016) for sixteen Sub-Saharan African countries. The fixed effect model estimation result indicated that GDP of exporting countries, foreign direct investment, population growth, real effective exchange rate and trade openness affect positively and significantly the export performance of Sub-Saharan African countries. While infrastructural and financial development found to be insignificant for the export development of the region. The study indicated that country specific fixed effects have significant impact on the export performance of each country irrespective of the factors incorporated in the model. The time specific fixed indicated through time the export performance of the region improved from 1987 to 2016. Comparatively, the result indicated supply side factors are more important than the demand side in determining the export performance of Sub-Saharan African countries.

Keywords: Country specific fixed effect, demand side factor, Export performance, fixed effect Estimation Technique, Supply side factor and Time specific fixed effects