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Determinants of Trade in Climate-Smart Goods and Technologies (CSGT) of Ethiopia


Due to the direct impact trade has on the environment, different parties are suggesting different solutions to the impact. Among such solutions, increasing trade in Climate Smart Goods and Technologies (CSGT) is one of them. This study, determinants of trade CSGT of Ethiopia, is conducted to identify the determinants of CSGT trade with highest trading partners of Ethiopia. The study has asked two questions to answer; what is the trend and share of CSGT trade of Ethiopia? What is the role of distance and other variables in explaining bilateral trade in CSGT of Ethiopia? In order to answer these questions, the study has used descriptive and econometric approaches and utilized secondary data sources organized in panel form with 160 observations (10 years by 16 partners with Ethiopia). The gravity model of bilateral trade is used to estimate, using a random effects model, the coefficients of the determinants as an econometric approach.

The result of the descriptive study showed that Ethiopia’s CSGT trade has a fluctuating trend and it has increased compared to the previous. Besides, the share of CSGT trade of Ethiopia less than 4% of the total trade of Ethiopia. The econometric analysis depicts that size of an economy (represented by per capita GDP) of Ethiopia and the trading partner is found to be positive and significant. However, the role of geographical proximity (distance and common border) is insignificant. It is also found that a trading partner of Ethiopia being an OECD has a positive impact on the CSGT trade. The same is true if a partner is either China or India, which have more than 70% share of the total CSGT trade of Ethiopia. Besides, landlockedness dummy is found to have the prior expectation of negative sign indicating to have a retarding impact on Ethiopia’s CSGT trade.

Corporate Author: 
Ethiopian Economics Association (EEA)
Ethiopian Economics Association (EEA)
Primary Descriptors: 

Climate-Smart Goods and Technologies (CSGT) ; Trade Partners

Secondary Descriptor: 

Trade Potential

Geographic Descriptors: 
Cataloge Date: 
Broad Subject heading: 
Call Number: 
330.0963 PRO 2017
Serial Key Title: 
Proceedings of the Fourteenth International Conference on the Ethiopian Economy
Publication catagory: 
Content type: 
Publication date: 
2017-06-01 00:00:00
Conference Place: 
Addis Ababa, EEA Multi-purpose Building Conference Hall
Place of publication: 
Addis Ababa, Ethiopia
Type of material: 
Current frequency: 
Thematic area: 
Macroeconomics, Trade and Industry Related Topics
Conference date: 
July 21 – 23, 2016