Determinants of Tanzania Exports: A Panel Data Regression Approach.
- Author Benedicto Kazuzuru
- DOI
- Country : Tanzania
- Subject : Mathematics
Keywords : Exports, Panel data, Gravity model
Abstract
One of the major problems among developing countries including Tanzania is the persistence negative balance of trade and balance of payment which results into lack of foreign currency to finance imports. In Tanzania a number of scholars have addressed this problem by finding ways to boost export performance. Unfortunately, over the years dominant studies on export performance particularly in Tanzania have been mainly time series studies which of course suffer from the fact that African countries including Tanzania have no adequate time series data. The most that an African country could have in time series data is a series of 60 years (from independence to the present time). On top of this problem time series estimates might be inconsistent as they cannot safe guard a model from omitted variables. This study employed panel data model in explaining determinants of Tanzania exports. Panel data provides more data points and they are somewhat immune to problems of omitted variables. The proposed determinants were lagged export value, FDI’s, Tanzania GDP; partner Country GDP, Distance, real exchange rate, and dummies for regional economic integration (SADC and EAC). The results indicate all the variables to be significant in explaining exports except real exchange rates. It is recommended to the government of Tanzania and to other stake holders to actively promote foreign direct investments, to handle the oversee customers with a great care, promoting exports to the oversee through its organs such as TANTRADE, and improving the Tanzanian GDP through rapid industrialization and through agriculture improvement.
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