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Revealed Comparative Advantage of Ethiopian Leather Industry with Selected African Economies

Received: 31 July 2015    Accepted: 11 August 2015    Published: 3 September 2015
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Abstract

The aim of this paper is to analyze the growth pattern of trade flow and trade comparative advantages of the leather industry products between some selected African economies-Kenya, Egypt, Tunisia and with particular focus on Ethiopia between 2004 to 2013. In doing so, it has been calculated the Balassa index of revealed comparative advantage using industry data at the HS 2-digit level. The studies mainly focus on the two articles of Ethiopian leather export namely, Product: 41 raw hides and skins (other than furskins) and leather, and Product: 42 Articles of leather, animal gut, harness, travel goods. An in-depth revealed comparative advantage (RCA) has been conducted for these two categories separately and the analysis shows that Ethiopia has a comparatively high RCA in raw hide and skin exports over the selected economies during the period of study. Even if RCA index for leather and leather products is less than one, a very promising trend has been observed, as index has been increased about 3,395% in the studied time. This indicates that Ethiopia has significant potentiality for specialization in leather export both in raw hides and skins and leather product. The paper also highlights that all stakeholder in the country has to work very closely to boost the performance of the leather industry export in the light of evidence. Therefore, investors, entrepreneurs and policy makers should specialize in both raw hides and skins and leather and leather productions and exports to generate more export revenues for the country.

Published in International Journal of Business and Economics Research (Volume 4, Issue 5)
DOI 10.11648/j.ijber.20150405.11
Page(s) 229-237
Creative Commons

This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.

Copyright

Copyright © The Author(s), 2024. Published by Science Publishing Group

Keywords

Revealed Comparative Advantage, Ethiopia, Raw Hide and Skin, Leather and Leather Products, Balassa Index, Exports

References
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[7] Sadaf Shahab1, Muhammad Tariq Mahmood ‘’Comparative Advantage of Leather Industry in Pakistan with Selected Asian Economies’’ International Journal of Economics and Financial Issues, Vol. 3, No. 1, 2013, pp.133-139.
[8] Sapir, A. (1992). "Regional Integration in Europe." Economic Journal 102(415, November):1491-1506.
[9] Richardson, D. J., & Zhang, C. (1999). “Revealing Comparative Advantage: Chaotic or Coherent Patterns across Time and Sector and U.S Trading Partner? National Bureau of Economic Research, Working Paper 7212.
[10] Bender S. & Li Kui-Wai (2002). “The Changing Trade and Revealed Comparative Advantages of Asian and Latin American Manufacture Exports”, Working Papers 843, Economic Growth Center, Yale University.
[11] Felix Chari, Bongani Muchanyuri and Macleans Mzumara, ‘‘Comparative Advantage of Ethiopia and the Role of International Purchasing’’ Greener Journal of Economics and Accountancy Vol. 2(2), pp. 051-057, June 2013.
[12] Mudavanhu, V., Mzumara, M. & Tafirei, F. (2014). ‘’Competitiveness of Kenyan industries in world trade’’, International Journal of Social Sciences and Entrepreneurship, 1 (9), 132-145.
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[15] Mahmoud Q. and Terry M. Amman,( 2009) ‘’A mission for Accomplishment of a Comprehensive sector study regarding the opportunities of Complementarities and Industrial Integration in the Leather and Shoes Sector in the Member Countries of the Agadir Agreement ( Egypt - Jordan - Morocco & Tunisia), The Arab Mediterranean Free Trade Agreement, Agadir Technical Unit(ATU), Final Report.
[16] USAID/Cairo, Ministry of Foreign Trade ‘’Impact of Trade and Economic Policy Reforms on Key Sectors of the Egyptian Economy’’, Final Report, April 2004.
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[18] Mahmud, A. 2000. Development potential and constraints of hides and skins marketing in Ethiopia. In: R. C. Merkel, G. Abebe and A. L. Goetsch (eds.). The Opportunities and Challenges of Enhancing Goat Production in East Africa. Proceedings of a conference held at Debub University, Awassa, Ethiopia from November 10 to 12, 2000. E (Kika) de la Garza Institute for Goat Research, Langston University, Langston, OK pp. 127-138.
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[20] Loop T. van der. 2003. "The importance of the leather footwear sector for development in Ethiopia", RLDS Policy Brief No. 1, Addis Ababa University, Ethiopia.
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[22] Girum Abebe* and Florian Schaefer**. “High Hopes and Limited Successes: Experimenting with Industrial Polices in the Leather Industry in Ethiopia’’, EDRI Working Paper 011, December 2013, Ethiopian Development Research Institute and Department of Development Studies, SOAS (University of London).
[23] Balassa, B. (1977). “Revealed Comparative Advantage Revisited: An Analysis of Relative Export Shares of the Industrial Countries, 1953-1971”, Manchester School of Economic & Social Studies, 1977, vol. 45, issue 4, pp. 327-44.
[24] Balassa, B. (1979). "The Changing Pattern of Comparative Advantage in Manufactured Goods,” Review of Economics and Statistics, 61 (May), pp. 259-266.
[25] Balassa, B. (1986). “Comparative Advantage in Manufactured Goods: A Reappraisal”, the Review of Economics and Statistics, Vol. 68, No. 2, pp. 315-319.
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[27] Bender S., & Li, Kui-Wai (2002). “The Changing Trade and Revealed Comparative Advantages of Asian and Latin American Manufacture Exports”, Working Papers 843, Economic Growth Center, Yale University.
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    Mulat Alubel Abtew. (2015). Revealed Comparative Advantage of Ethiopian Leather Industry with Selected African Economies. International Journal of Business and Economics Research, 4(5), 229-237. https://doi.org/10.11648/j.ijber.20150405.11

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    ACS Style

    Mulat Alubel Abtew. Revealed Comparative Advantage of Ethiopian Leather Industry with Selected African Economies. Int. J. Bus. Econ. Res. 2015, 4(5), 229-237. doi: 10.11648/j.ijber.20150405.11

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    AMA Style

    Mulat Alubel Abtew. Revealed Comparative Advantage of Ethiopian Leather Industry with Selected African Economies. Int J Bus Econ Res. 2015;4(5):229-237. doi: 10.11648/j.ijber.20150405.11

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  • @article{10.11648/j.ijber.20150405.11,
      author = {Mulat Alubel Abtew},
      title = {Revealed Comparative Advantage of Ethiopian Leather Industry with Selected African Economies},
      journal = {International Journal of Business and Economics Research},
      volume = {4},
      number = {5},
      pages = {229-237},
      doi = {10.11648/j.ijber.20150405.11},
      url = {https://doi.org/10.11648/j.ijber.20150405.11},
      eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijber.20150405.11},
      abstract = {The aim of this paper is to analyze the growth pattern of trade flow and trade comparative advantages of the leather industry products between some selected African economies-Kenya, Egypt, Tunisia and with particular focus on Ethiopia between 2004 to 2013. In doing so, it has been calculated the Balassa index of revealed comparative advantage using industry data at the HS 2-digit level. The studies mainly focus on the two articles of Ethiopian leather export namely, Product: 41 raw hides and skins (other than furskins) and leather, and Product: 42 Articles of leather, animal gut, harness, travel goods. An in-depth revealed comparative advantage (RCA) has been conducted for these two categories separately and the analysis shows that Ethiopia has a comparatively high RCA in raw hide and skin exports over the selected economies during the period of study. Even if RCA index for leather and leather products is less than one, a very promising trend has been observed, as index has been increased about 3,395% in the studied time. This indicates that Ethiopia has significant potentiality for specialization in leather export both in raw hides and skins and leather product. The paper also highlights that all stakeholder in the country has to work very closely to boost the performance of the leather industry export in the light of evidence. Therefore, investors, entrepreneurs and policy makers should specialize in both raw hides and skins and leather and leather productions and exports to generate more export revenues for the country.},
     year = {2015}
    }
    

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  • TY  - JOUR
    T1  - Revealed Comparative Advantage of Ethiopian Leather Industry with Selected African Economies
    AU  - Mulat Alubel Abtew
    Y1  - 2015/09/03
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    DO  - 10.11648/j.ijber.20150405.11
    T2  - International Journal of Business and Economics Research
    JF  - International Journal of Business and Economics Research
    JO  - International Journal of Business and Economics Research
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    PB  - Science Publishing Group
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    UR  - https://doi.org/10.11648/j.ijber.20150405.11
    AB  - The aim of this paper is to analyze the growth pattern of trade flow and trade comparative advantages of the leather industry products between some selected African economies-Kenya, Egypt, Tunisia and with particular focus on Ethiopia between 2004 to 2013. In doing so, it has been calculated the Balassa index of revealed comparative advantage using industry data at the HS 2-digit level. The studies mainly focus on the two articles of Ethiopian leather export namely, Product: 41 raw hides and skins (other than furskins) and leather, and Product: 42 Articles of leather, animal gut, harness, travel goods. An in-depth revealed comparative advantage (RCA) has been conducted for these two categories separately and the analysis shows that Ethiopia has a comparatively high RCA in raw hide and skin exports over the selected economies during the period of study. Even if RCA index for leather and leather products is less than one, a very promising trend has been observed, as index has been increased about 3,395% in the studied time. This indicates that Ethiopia has significant potentiality for specialization in leather export both in raw hides and skins and leather product. The paper also highlights that all stakeholder in the country has to work very closely to boost the performance of the leather industry export in the light of evidence. Therefore, investors, entrepreneurs and policy makers should specialize in both raw hides and skins and leather and leather productions and exports to generate more export revenues for the country.
    VL  - 4
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Author Information
  • Ethiopian Institute of Textile and Fashion Technology [EiTEX], Bahir Dar University, Bahir Dar, Ethiopia

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