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The Determinants of Export Performance in a Small Open Economy: The Case of Sierra Leone

Received: 19 January 2021     Accepted: 28 January 2021     Published: 2 February 2021
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Abstract

The main objective of this paper is to investigate the determinants of export performance in Sierra Leone. The study uses annual time series data from 1980 to 2018 within the ARDL bound testing framework. The stationarity test indicates that all the variables are I(1) series, whilst the bound test result shows there is cointegration. The result reveals that FDI, REER and dummy variable for war are the main determinants of export performance in the long run. Also, the result confirms that FDI and inflation are the significant variables influencing export performance in the short run. Furthermore, with a coefficient of 0.51, the result indicates that 51 percent of any disturbance emanating from previous year’s shocks will be corrected in the current year. The diagnostic test reveals that, approximately 69 percent of the variation in export performance is determined by the exogenous variables as evident by the R-square value. Overall, the probability value of the F-statistic (0.000000), shows that model is significant. The results of CUSUM and CUSUMSQ statistics indicate parameter stability. In order to improve the country’s export performance, the paper recommends that government should ensure macroeconomic stability, design incentive mechanisms to encourage foreign direct investment and also maintain a politically stable economy.

Published in International Journal of Economics, Finance and Management Sciences (Volume 9, Issue 1)
DOI 10.11648/j.ijefm.20210901.11
Page(s) 1-6
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), 2021. Published by Science Publishing Group

Keywords

Export Determinants, Sierra Leone, ARDL, Annual Series

References
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[2] Epaphra, M (2016). Determinants of Export Performance in Tanzania. Journal of Economics Library, Vol 3 (3).
[3] Muhammad, Z. (2010). Openness and inflation: Evidence from time series data. Doğuş Üniversitesi Dergisi, 11 (2).
[4] Hervé, D. B. G., Amoro G., Mahfoudh R. S. and Constant N. Z. S. (2014). The Determinants of Export Performance: The Case Study of Zanzibar Export. International Journal of Economics and Finance, 6 (6), 95-102.
[5] Sayed, I. H, Akhtar, H and Muhammad, M. A (2020). Determinants of export supply in Pakistan: A sector wise disaggregated analysis, Cogent Economics & Finance, 8: 1, 1732072.
[6] Uysal, Ö and Mohamoud, A. S (2018). Determinants of Export Performance in East Africa Countries. Chinese Business Review, Apr. Vol. 17, No. 4, 168-178.
[7] Hsiao, F. S. T., & Hsiao, M. W. (2006). FDI, exports, and growth in East and Southeast Asia: Evidence from time-series and panel data causality analyses. Paper presented at 2006 International Conference on Korea and the World Economy V, Seoul, Korea.
[8] Balogun, E. D. (2007). Effects of exchange rate policy on bilateral exports trade of WAMZ countries, MPRA Working Paper, No. 6234.
[9] Mohamad, S., Nair, M., & Jusoff, K. (2009). Exchange rates and export competitiveness in selected ASEAN economies. International Business Research, 2 (2), 156-166.
[10] Rodrick. D. (1999). The new global economy and developing countries making openness work. Washington: Overseas Development Council.
[11] Tyler, W. G. (1981). Growth and export expansion in developing countries: Some empirical evidence. Journal of Development Economics, 9 (1), 121-130.
[12] Kumar, N. (1998). Multinational enterprises, regional economic integration, and export platform production in the host countries: An empirical analysis for the US and Japanese corporations. eltwirtschaftliches Archiv, 134, 450-483.
[13] Fugazza, M (2004), Export Performance and Its Determinants: Supply and Demand Constraints, Policy Issues in International Trade & Commodities Study Series No. 26, UNCTAD.
[14] Pesaran, M. H., Shin, Y., & Smith, R. J. (2001). Bounds testing approaches to the analysis of level relationships. Journal of Applied Econometrics, 16 (3), 289–326.
[15] Edwards, L and Alves, P (2006). South Africa’s export performance: determinants of export supply. South African Journal of Economics Vol. 74: 3 September.
[16] Morrissey, O., & Mold, A. (2006). Explaining Africa’s Export Performance—Taking a New Look. Discussion paper.
[17] Sharma, K. (2000). Export growth in India: Has FDI played a role? Charles Sturt University, Discussion paper, No 816.
[18] Pesaran, M. H., Pesaran, B. (1997), Working with Microfit 4.0: Interactive Econometric Analysis. Oxford: Oxford University.
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  • APA Style

    Abu Bakarr Tarawalie, Morris Conteh. (2021). The Determinants of Export Performance in a Small Open Economy: The Case of Sierra Leone. International Journal of Economics, Finance and Management Sciences, 9(1), 1-6. https://doi.org/10.11648/j.ijefm.20210901.11

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    ACS Style

    Abu Bakarr Tarawalie; Morris Conteh. The Determinants of Export Performance in a Small Open Economy: The Case of Sierra Leone. Int. J. Econ. Finance Manag. Sci. 2021, 9(1), 1-6. doi: 10.11648/j.ijefm.20210901.11

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    AMA Style

    Abu Bakarr Tarawalie, Morris Conteh. The Determinants of Export Performance in a Small Open Economy: The Case of Sierra Leone. Int J Econ Finance Manag Sci. 2021;9(1):1-6. doi: 10.11648/j.ijefm.20210901.11

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  • @article{10.11648/j.ijefm.20210901.11,
      author = {Abu Bakarr Tarawalie and Morris Conteh},
      title = {The Determinants of Export Performance in a Small Open Economy: The Case of Sierra Leone},
      journal = {International Journal of Economics, Finance and Management Sciences},
      volume = {9},
      number = {1},
      pages = {1-6},
      doi = {10.11648/j.ijefm.20210901.11},
      url = {https://doi.org/10.11648/j.ijefm.20210901.11},
      eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijefm.20210901.11},
      abstract = {The main objective of this paper is to investigate the determinants of export performance in Sierra Leone. The study uses annual time series data from 1980 to 2018 within the ARDL bound testing framework. The stationarity test indicates that all the variables are I(1) series, whilst the bound test result shows there is cointegration. The result reveals that FDI, REER and dummy variable for war are the main determinants of export performance in the long run. Also, the result confirms that FDI and inflation are the significant variables influencing export performance in the short run. Furthermore, with a coefficient of 0.51, the result indicates that 51 percent of any disturbance emanating from previous year’s shocks will be corrected in the current year. The diagnostic test reveals that, approximately 69 percent of the variation in export performance is determined by the exogenous variables as evident by the R-square value. Overall, the probability value of the F-statistic (0.000000), shows that model is significant. The results of CUSUM and CUSUMSQ statistics indicate parameter stability. In order to improve the country’s export performance, the paper recommends that government should ensure macroeconomic stability, design incentive mechanisms to encourage foreign direct investment and also maintain a politically stable economy.},
     year = {2021}
    }
    

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    AU  - Abu Bakarr Tarawalie
    AU  - Morris Conteh
    Y1  - 2021/02/02
    PY  - 2021
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    DO  - 10.11648/j.ijefm.20210901.11
    T2  - International Journal of Economics, Finance and Management Sciences
    JF  - International Journal of Economics, Finance and Management Sciences
    JO  - International Journal of Economics, Finance and Management Sciences
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    PB  - Science Publishing Group
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    UR  - https://doi.org/10.11648/j.ijefm.20210901.11
    AB  - The main objective of this paper is to investigate the determinants of export performance in Sierra Leone. The study uses annual time series data from 1980 to 2018 within the ARDL bound testing framework. The stationarity test indicates that all the variables are I(1) series, whilst the bound test result shows there is cointegration. The result reveals that FDI, REER and dummy variable for war are the main determinants of export performance in the long run. Also, the result confirms that FDI and inflation are the significant variables influencing export performance in the short run. Furthermore, with a coefficient of 0.51, the result indicates that 51 percent of any disturbance emanating from previous year’s shocks will be corrected in the current year. The diagnostic test reveals that, approximately 69 percent of the variation in export performance is determined by the exogenous variables as evident by the R-square value. Overall, the probability value of the F-statistic (0.000000), shows that model is significant. The results of CUSUM and CUSUMSQ statistics indicate parameter stability. In order to improve the country’s export performance, the paper recommends that government should ensure macroeconomic stability, design incentive mechanisms to encourage foreign direct investment and also maintain a politically stable economy.
    VL  - 9
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Author Information
  • Department of Economics and Commerce, Fourah Bay College, University of Sierra Leone, Freetown, Sierra Leone

  • Department of Economics and Commerce, Fourah Bay College, University of Sierra Leone, Freetown, Sierra Leone

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