Comparative analysis of the effect of traditional and non-traditional exports on economic growth in Tanzania
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Date
2023
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Publisher
The University of Dodoma
Abstract
Trade contribution especially foreign trade attracts great attention to the economic Tanzania’s growth has been implementing a variety of trade policy reforms to foreign trade. However, over time, the proportion of exports value has remained persistently low. Various empirical investigations exist on the link between international trade and the nation's economic growth. However, these empirical findings did not distinguish between impact of export diversification on economic growth. Instead, the study investigated the comparative analysis of effect of export diversification on the Tanzania’s economic growth. The study specifically investigated the effect of traditional exports, non-traditional exports, and total exports on economic growth in Tanzania. Also, exchange rate, foreign direct investment, and terms of trade, were used as control variable. The data covering 31 years (1991 to 2021) collected from the United Nations Conference on Trade and Development, World Bank and Bank of Tanzania were used. The study employed Johansen test, Granger Causality test, and vector error correction model. The model revealed that, traditional exports are insignificant and positive while non-traditional exports, grand total exports, and terms of trade have a significant and positive effect on economic growth in the long run. Further, the results showed a significant and negative relationship between exchange rates and economic growth in both short-run and long-run outcomes. Terms of trade, traditional export, and non-traditional export have a significant and positive effect on economic growth in the short run. This study concludes that Tanzania's economic growth is significantly influenced by traditional exports; non-traditional exports and grand total exports. According to the findings of the study, it is strongly advised that the Tanzanian government strengthens its export policies, with particular emphasis on non-traditional goods as opposed to traditional exports, as they play a crucial role in fostering the economic development of the country.
Description
Dissertation (Ma in economics)
Keywords
Comparative analysis, Traditional and non-traditional exports, Economic growth, Foreign trade, Tanzania
Citation
Msalilwa, F. N (2023). Comparative analysis of the effect of traditional and non-traditional exports on economic growth in Tanzania (Master dissertation). The University of Dodoma.