Department of Economics

URI for this collectionhttps://rps.wku.edu.et/handle/123456789/45802

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EXCHANGE RATE, NET EXPORT AND ECONOMIC GROWTH IN EAST AFRICAN COUNTRIES: PANEL DATA ANALYSIS
(WOLKITE UNIVERSITY, 2018-06) AMSALU BICHINU AYALEW,
This paper examines an empirical investigation of exchange rate, net export and economic growth in east African countries. The study fully employing a strongly balanced panel data the period from 2000 to 2015/2016.The data set is collected from NBE, IMF and WB. The study employed Random effect model as confirmed by Hausman test.The study found that net export; real exchange rate, trade openness and expenditure of government are positive and significantly explained economic growth.The empirical investigation of in this study indicates that both exchange rate and net export are equally important and the advance issue of determining economic growth.The estimation result suggested that, a depreciation of exchange rate and the improvement of net export were improves economic growth and all types of import and exports, a result that is statistically significant and consistent with the standard economic theory. The policy recommendation of these countries should take emphasis and give more attention to improve more advancements of manufacturing product rather to devaluate exchange rate
INTERNATIONAL REMITTANCE AND ECONOMIC GROWTH IN ETHIOPIA: AN AUTOREGRESSIVE DISTRIBUTED LAG APPROACH
(WOLKITE UNIVERSITY, 2018-06) ABDURAHMAN AGIRO
Having the general objective of investigating the relationship between international remittances and economic growth in Ethiopia, this study used an auto regressive distributed lag (ARDL) model or Bound Testing approach to co-integration. The data used is from Ethiopian economic association, national bank of Ethiopia and World Bank Development Indicators which spans from 1980 to 2016. The outcome of the study revealed that, both the long run and short run growth impact of international remittance during the study period is positive and significant. Apart from this, other growth determinant factors, such as real gross fixed capital formation, human capita and consumer price index are found to significantly and positively affecting growth in Ethiopia. Trade openness has found Negative and significantly impact economic growth. Moreover, the Granger Causality test has confirmed that there is a unidirectional causality which runs from remittance to output. The most important policy implication that comes out of this study is that the government as well as other concerned stakeholders should work on easing the remittance sending process and cost, so as to better extract the economic benefit of international remittance.
DETERMINANTSOFAGRICULTURALPRODUCTIVITYAND RURALHOUSEHOLDINCOMEINETHIOPIA
(WOLKITE UNIVERSITY, 2018-06) BIRHAN GIRMA
Population Growth and Economic Development in Ethiopia
(Wolkite University, 2018-06) Kasim Nejmu
The debate on the relationship between population growth and economic growth has been undergoing over a long period of time and yet it is inconceivable developing countries in generally and Ethiopia particularly. Hence, this study aimed to analyze the impact of population growth on economic development of Ethiopia using time series data from 1974/75 to 2015/16 by employing Johansen co-integration test, Granger causality test, VAR and VECM. The study found that population growth had a significant negative impact both in the short run and in the long run on economic development. While government education expenditure as percentage ofRGDP is positive and statistically significant relationship with economic development. The results of causality test shows that there exists unidirectional relationship running from economic development to population growth in long run. Lastly the study recommends that the government as well as the concerned body should exert their effort to balance the population growth and economic development
ASSESSMENT OF INTEREST FREE BANKING SERVICE (CASE OF COMMERCIAL BANK OF ETHIOPIA WEST ADDIS ABABA DISTRICT)
(WOLKITE UNIVERSITY, 2018-06) BERHANU BEYENE NURGI
The main objective of this Study is to assess interest free banking service in commercial bank of Ethiopia- West Addis Ababa District. The study has employed descriptive research design and has used both primary and secondary data which have been collected through structured questionnaire and semi structured interview. A total of 398 sample respondents were taken through judgment & Convenience sampling for Employees & Customers respectively. The data was analyzed using descriptive statistics of mean, frequency, percentage, and standard deviation using Statistical Package for Social Science version 16 software. Based on the analysis of the study, the result shows that there is performance lagging of Interest free Banking financing products, lack of well trained & experienced employees with Interest free Banking in the branches, lack of awareness of customer about Interest free Banking products, inadequate marketing and promotion, unavailability of Interest free Banking financing products in all ofCommercial Bank of Ethiopia branches, and Interest free Banking as ameans of resource mobilization Strategy in Commercial Bank of Ethiopia. The study concluded that, Commercial Bank of Ethiopia has the capacity to provide the other interest free banking products & Service to its customers provided that there is commitment and support from all stakeholders of the bank including National Bank of Ethiopia. Based on the results of the findings, the study recommended that Interest free Banking should be given the necessary attention and support from all stakeholders, the bank has to be ready and committed in all aspect to deliver Interest free Banking products, aggressive promotion and marketing campaign about Interest free Banking products should be made, The Bank has to increase the accessibility of Interest free Banking products through increasing Interest Free Banking Window at each service providing Branch.
Impact of technology Adoption legume producing on Farmers’ Income: A Case study of Guraghe Zone
(Wolkite University, 2019) Sahlu Badishe
The importance of agricultural technology in enhancing production and productivity can be realized when yield increasing technologies are widely been used and diffused. Standing from this logical ground, this paper aimed to evaluate the impact of legumes technologies adoption on farm income on Guraghe Zone in Ethiopia. This study used cross sectional data that acquired from total of 204 households which were randomly and proportionately sample from 9 major legumes producer kebeles in three district of Guraghe zone stratifies sampling techniques. Logit model was used to estimate to identify underlying factor that determine adoption of legume technologies(improve legume seed, fertilizers, chemicals, inoculants and farming techniques). PSM model wasused to estimate to evaluate the impact of legume technologies adoption of farmers’ income. Descriptive statistics and econometric models were used to analyze the data. The results from log it model indicate that educational level of household, the household headed, member of cooperative association, to advices to agricultural extension services, size of cultivated land forcrop, credit access, off-farm participation and tropical livestock unit positively significant adopt of legume technologies adoption. If female of household headed and plot size for legumes crop cultivated purpose negatively significant influence of legume technologies adoption. Impact assessment of the marginal effect showed that farmers who had adopted legume technologies could enhance their annual total income level by 46.6% and the crop income particularly from grain legume has been increased by 88%. What about the impact based on the findings, the study suggests that strengthening the promotion of full package technology adoption will have crucial role towards improving the livelihood of households in the study area. In doing so, managing the possible influencing factors that affect adoption of legume technology should be a prerequisite.
THE EFFECT OF NETWORKING ON PERFORMANCE OF MEDIUM SIZE ENTERPRISE IN ETHIOPIA
(WOLKITE UNIVERSITY, 2019-01) BELAY ASEFA, BELAY
In order to stay competitive in business and improve performance, medium size enterprise firms to understand how, when and with whom to networked to improve on their performance and increase their market share and worthiness of their firms. The general objective of this study was to evaluate the effects of networking on performance of medium size enterprise firms in Ethiopia medium size enterprise need to work in collaboration with others. It is necessary to create chain that gives value for business through networking. The purpose of this study was to test the impact of networking on the business performance of medium size enterprises in Ethiopia. The questionnaire survey method was used in this study to collect data from respondents. The data was collected from 128 samples of respondents recognized through stratified random sampling technique and the collected data was analyzed using ordered probit model: which is one of nonlinear models used for analyzing data measured on ordinal scale. This research paper identifies the relationship between enterprise and the concerned stock holder improved business networking enterprises increased their performance IN this survey study it was found that networking with financial institutions, business connection, trade linkage and quality of the relationship in network positively and significantly related with business performance of medium size enterprises. In addition to this, firm age was positively and significantly related with business performance of medium size enterprises. This was indicated with regression co-efficient of the variables the result of this study recommends the need for government and other stakeholders to improve the networking skills of medium size enterprise to significantly improve business performance
Impact of Road Infrastructure Development for Economic Growth in Ethiopia
(WOLKITE UNIVERSITY, 2019-01) Bahirnesh Assefa
This paper examined impact of road infrastructure development on economic growth in Ethiopia. The general specification of the model is an augmented Solow Growth model. Such a model is basically a VAR. The logarithmic form of this production function of Solow growth model allows including road network and good values of export or import in national currency per total road length variables which impact for growth of GDP. Vector auto regressive model (VAR) use analyzes the secondary data for the long run relationship between road infrastructure development and economic growth in Ethiopia. The study is making use of time series data for the period 1975 to 2017. The data used is from secondary data sources such as central statistics agency, World Bank, IMF, MOFED, and African Development Bank (ADB). The objective of the study is the impact of the road infrastructure development for economic in Ethiopia. The result shows that road infrastructure development for asphalt road, gravel road, road density per 1000 km2 and export of goods values per total road length in national currency have a positive impact with economic growth in the long run. And also in the same result that total road length per 1000 persons (labour force) and importing goods values per total road length in national currency shows a negative impact on economic growth in the long run. Based on the findings, it was suggested that the government should come up with sustainable and implementable road infrastructure development for economic growth. Maintenance Road Sector Development Program (RSDP) that will ensure good access road network in Ethiopia. Also, economic growth in Ethiopia depended on the level of good and accessible road network is increasing transportation and facilitates for exporting goods (economic activity)
Multidimensional Measure of Poverty in Urban Ethiopia
(Wolkite University, 2019-01) Awoke Ambachew
Multidimensional, Poverty, logit, Urban, Ethiopia
THE IMPACT OF FOREIGN AID ON AGRICALTURAL GROWTH IN ETHIOPIA A TIME SERIES ANALYSIS
(WOLKITE UNIVERSITY, 2019-01) Abdulhake Teni
The study has empirically examined the impact of foreign aid on Agricultural growth in Ethiopia over the period 1974/75 to 2015/16 using time series analysis. The main hypothesis of the study is that foreign aid has an impact on agricultural growth of Ethiopia. To test this hypothesis an empirical model is estimated using Johansen integration test and Vector Error Correction model (VECM) as the estimation techniques to estimate the long run and short run relationship. The empirical result from the statistical analysis shows that foreign aid has negative insignificant impact on agricultural growth in the long run and also arable land, capital investment, labor and government expenditure on agriculture sector have positive significant impact on agricultural growth in the long run. The result of the study reveals that foreign aid which is directly given to agricultural sector for agricultural growth has a long-run relationship according to the Johansen integration test. The most important policy implication of the result is that arable land capital investment labor and government expenditure is crucial to increase agricultural growth of Ethiopia both in both long run and short run than encourage direct foreign aid in agricultural sector.
Impact of Self Help Groups (SHG) on women welfare indicators in Waliso Town, South West Shoa Zone, Oromia Region, Ethiopia
(WOLKITE UNIVERSITY, 2019-01) Misgana Gedafa Kitesa
The study was initiated to assess the impacts of self-help groups in women welfare indicators, investigate the welfare of women, identify the factors by using random sampling technique in cross sectional data types with propensity score match model to evaluate the treated and control group and identify the challenges encountered. Self help groups (SHG) face at unit and system levels and explore the contribution of social organizations in strengthening SHG. The study result revealed that self-help groups (SHG) are playing important role in determining the status of women in self-help groups (SHG) and the level of decision making in the group and at household level. The core point of this paper is that working impact of Self help group which contains the introduction part literature review methodology result and discussion and the conclusion and recommendation. Women are also advocating about women and their families in several occasions and are attracting the attention of the administration at different level as important partner. The income, asset accumulation, food and non food consumption expenditure and saving of women have shown improvement with the amount of loan they borrow from the inbox of the self-help groups (SHG). The welfare indicators that women incurred from the organization in Self help group make them more economically independent. Generally, the impact of self-help groups (SHGs) is magnificent in improving women welfare and makes themto be economically self-reliant. Types of occupation such as traditional alcohol work, preparing and selling dry “enjera”, animal fattening, the Communication and experience; saving and access to credit are significant and need more external support are more the focus of this stud
ROLE OF PRODUCTIVEE SAFETY NET PROGRAM ON HOUSEHOLDS PARTICIPAION ON OFF-FARM ACTIVITIES IN ETHIOPIA: THE CASE OF MAREKO DISTRICT
(Wolkite University, 2019-01) REDWAN KEDIR
This research attempted to assess the role of productive safety net program on household participation on off-farm activity in Mareko district of Southern Nation Nationality Region. Purposive, stratified proportionate random sampling and simple random sampling techniques were employed to select sample respondents. A total of 200 households were selected for the study. The instrument developed was survey questionnaire. Both qualitative and quantitative data were gathered for the study. Descriptive statistics like frequency, percentage, and econometrics models were employed to analyze the survey data. The descriptive statistics result revealed that, from the sampled respondents the majority (66.5 %) of households was participated in off-farm activity. From the total sampled respondents almost all were got their livelihoods from agricultural activities, which account on average (50 %) of the total annual income. The remaining 27% of incomes of the rural household head were off-farm activities. The result of probit model regression also indicates that, Gender (sex of household head, farming land size and total household size were found out significantly and positively affect the off-farm activity participation, while, age of household head, farm income and marital status were found out negative and significant factors. Propensity score matching techniques was used to analyzes the effect of PSNP participation on off-farm activity income. Albeit the result from the PSM was not statistically significant, it indicates that participation in PSNP program had negative effect on the off-farm activity income. Finally, it was recommended that Government and NGOs should provide training on more profitable off-farm activities for PSNP beneficiaries to support household’s participation on off-farm income generating activities
TAX REVENUE AND ECONOMIC GROWTH IN ETHIOPIA: A PANEL DATA APPROACH
(WOLKITE UNIVERSITY, 2019-01) MULUGETA ENDALE, MULUGETA
This study examines tax revenue and economic growth in some selected regional state of Ethiopia using annual panel data. Theoretically and empirically, it has been showed that taxes affect the allocation of resources. The main purpose of this study was to reveal the relationship between tax revenue and economic growth for the regional state of Ethiopia during the period 2005-2017. While, analyzing the effect of tax revenue on economic growth, the study applied panel long run and short run relationship between tax revenue and economic growth. The study applied fixed and random effect model, Johansen’s co integration test, VECM, and Granger causality test. The tax revenue with its component though affects economic growth significantly. The causal relationship with economic growth in the long run is not significant as expected. This implies there is independence between tax revenue and economic growth. In the short run the finding shows that there is no jointly causality between tax revenue and economic growth. Furthermore, the speed of adjustment is slow; however, to improve the speed of adjustment needs more controlling and monitoring system should be applied. The findings of the study major issues should the policymakers consider for effective taxation policy formulation and implementation of the economy.
THE NEXUS BETWEEN COFFEE EXPORTAND ECONOMIC GROWTH IN ETHIOPIA: EMPERICAL ANALYSIS
(WOLKITE UNIVERSITY, 2019-06) AHMYE DEREJE KIBRET,
The country has taken different measures to diversify and increase the contribution of coffee export to economic growth such as; export trade duty incentive scheme, export credit guarantees scheme and foreign exchange retention scheme to those wholly engaged in supplying their products to foreign markets. This paper investigated the relationship between coffee export and economic growth of Ethiopia, for the period 1974- 2017G.C.Despite the incentives taken by the country, the export sector has depended on a few agricultural products mainly coffee, oil seeds and pulses which are characterized by fluctuations in quantity, price and have low competitiveness on the world market. The objective of the study was to assess the trend and relationship of coffee exports on economic growth of Ethiopia over the last forty-three years by looking at the existence of long run relationship between coffee export and economic growth. The speed of adjustment in the long run and the existence of causality between the coffee export and economic growth. The analysis was done using co-integration model, Error correction model and Granger causality model. The findings of the study showed that Coffee export has a positive and significant relationship with economic growth. On the other hand, the causality relationship found that there is uni-directional relationship between coffee export and economic growth that means coffee does granger cause of RGDP. Finally, CUMSUM test confirms the long-run relationships between the variables and also shows the stability of the coefficients. Based on the findings, it is recommended that policies aimed at increasing the productivity and quality of this coffee production should be implemented. Also additional value should be added to them before exporting that means the roasted coffee and other things can be added. When this is done, it will lead to a higher rate of economic growth in Ethiopia.
ASSESSEMENT OF NON PERFORMING LOAN ON THE PROFITABLITY OF MICRO FINANCE INSTITUTIONS (IN CASE OF METEMEMAN IN MICRO FINANCE)
(WOLKITE UNIVERSITY, 2019-06) Solomon Gezmu, Solomon
This study would be conduct on the title of assessment of non-performing loan in micro finance institutions in metemamen micro finance. The general objective of the study is to assess factors that affect the credit management in micro finance institution of metemamen in wolkite branch. The specific objectives of the study are to analyses the assessment of non-performing loan, to assess the technique, used by institution to manage non performing loan.to analysis the main reason a loan become non performing. To assess after credit provision. In this study both primary source of data was used and the researcher would be used open end and close questionnaires and structured interview to collect data from the employee, customers and management body of the institutions and purposive method was used to collect data from employee and management body of metemamen credit and micro finance institution. And also the researcher was used descriptive method of data analyzing. The general objective of the study is to investigate factors that affect the credit management in micro finance institution of metemamen in wolkite branch. Longitudinal design is employed for a data collection and analysis purpose. The sample would be use selected by purposive sampling selection techniques. There are some problems related with collections of credit given to borrowers and any other related with it. Thus microfinance institutions and government should take a corrective measurement in order to reduce credit risk management in metemamen micro finance institutions
ANALYSIS OF FACTORS AFFECTING DEPOSIT MOBILIZATION OF PRIVATE COMMERCIAL BANKS IN ETHIOPIA
(WOLKITE UNIVERSITY, 2019-06) MEKUANINT AYALEW FELEKE, MEKUANINT
The aim of this study is analyzing factors affecting deposits mobilization of private commercial banks in Ethiopia. In doing so, the study used Pearson correlation analysis, ordinary least squares (OLS) technique, Granger causality analysis and descriptive statistics using secondary data. The data are collected from national bank of Ethiopia (NBE) and sampled private commercial banks from the year 2002 up to 2017. The collected panel data also, regressed based on random effect model. Econometric view version 8 (Eview 8) and stata version 13 statistical software has been used to perform the analysis. The result of correlation analysis showed that, deposit interest rate and lending interest rate strongly correlated, while the inflation weakly correlated with bank deposit. As per the Granger causality analysis, the variables included in the estimation model have a unidirectional relationship in the long run. In addition to, the results of regression analysis showed that, deposit interest rate; the lending interest rate and return on asset were positively and significantly influence the bank deposit. However, inflation affects bank’s deposit negatively and significantly during the study period. Finally the study has recommended that, the private commercial banks should give due emphasis to deposit mobilization tasks and its determining factors by considering mobilizing deposit is a way to sustain in the banking industry.
EFFECT OF INFRASTRUCTURE DEVELOPMENT ON RURAL POVERTY REDUCTION IN ETHIOPIA: PANEL DATA ANALYSIS
(Wolkite University, 2019-06) MESFIN NEGASH
The purpose of this study is to explore the effect of infrastructuredevelopment on rural poverty in Ethiopia. The effect of infrastructure development and rural poverty is examined by using panel data from the period 1995/96 to 2016. The data was sourced from the National Bank of Ethiopia, Central Statics Agency, and World Bank. To undertake this study, eleven regions of the country were used. The study used both descriptive statistics and econometric analyses. The descriptive statistical analysis displays the trend of infrastructure development on rural poverty reduction and the improvement of rural poverty is largely concerned with raising the quality of life of people living standards of the society. The Random effect model was used for econometrics analysis in order to show the effect of rural poverty. In analyzing the effect of infrastructure development on rural poverty in Ethiopia, the study were applied Unit root tests, and Granger causality test. Based on the findings, the study highlights major variable such as water, education,inflation and government expenditure has a significant effect on rural povertyreduction. The estimation result suggested that, an increasing infrastructure development reduces rural poverty. The causality estimation shows both electrification and road has a positive effect infrastructure development on rural poverty reduction. Furthermore, the study found unidirectional causal relationship moving from electrification and road while there is no causality between foreign direct investment, inflation, government expenditure, education and rural water with rural poverty. There is no bidirectional relation between variables. This finding is consistent with the standard economic theory. Based on the findings the study highlights major issues policymakers should give due attention towards the effective formulation and implementation of infrastructure development policies toreduce and eliminate rural poverty.
DETERMINANTS OF FOOD SECURITY IN THE RURAL HOUSEHOLDS OF SILITI WOREDA, SILITE ZONE, SNNPR, ETHIOPIA
(2019-06) MIFTA ABDELLA MUSTEFA
Household food security issues have become the concern of national governments as well as the international communities during the last few decades. Despite some improvements in recent years, poverty and food insecurity remain widespread and the main challenges in Ethiopia. The vast majority of extraordinarily poor households live in rural areas that are heavily reliant on rain fed agriculture. In Ethiopia, the Snnpr region in particular, has been prone to much suffering in the past, and was one of the hardest hit areas. An understanding of the major determinants of food security is important for interventions aiming at minimizing food insecurity. Therefore the objectives of this study were identified determinants of food security among rural households Siliti district of Silite Zone and were collected Sample from 256 households drawn from 7 randomly selected sample kebeles through interview schedule. Descriptive statistics and Econometric analysis were used. Logit model were employed of data analysis. The survey results indicate that 34.38 % of the respondents were food secure, while 65.63% were food insecure. Results also indicate that there was a significant mean difference between the food secure and food insecure households. The study reveals that reducing numbers and quantity of meals, sales of livestock, purchase food on cash, borrowing grain/ cash from others and eating less preferred food were some of frequently practiced coping mechanisms in study area. The Logit result shows that marital status household head, marital status of household head, use of chemical fertilizer, and size of cultivated land, total income of household, credit access and Social capital were found to be significant in determining household food security. Generally, the study recommends that proactive policy which facilities the family planning techniques, expansion of infrastructure services, as well as awareness creation on better utilization of credit with expansion of credit access should be integrated as food security efforts.
SAVING AND ECONOMIC GROWTH IN ETHIOPIA
(WOLKITE UNIVERSITY, 2019-06) TUMSIDO TIRFE
The objective of this paper is to investigate causal relationship between gross domestic savingand economic growth of Ethiopia by using annual time series data for the period of 1975/76-2017/18. In order to achieve these objectives by using unit roots tests, multivariate Johansen co integration, Vector Autoregressive (VAR), Error correction model (VECM) and Granger Causality tests were undertaken. The result of Johansen Co-integration Test indicates that there is presence of one co-integrating vector in the model. The long run and short run regression results indicates that though there exists positive relationship between gross domestic saving and economic growth, the impact of gross domestic savings on economic growth is statistically significant in both cases. Finally, the result of Granger causality test reviled that unidirectional relationship exists between gross domestic product (GDP) and gross domestic savings; and the causality run from gross domestic product (GDP) to gross domestic savings. So the overall short run results favor Keynesian point of view that savings depend upon level of output. Based on the findings of study, government and policymakers should employ policies that would increase domestic saving to the extent it becomes a driving force for economic growth.
IMPACTS OF SAVING AND CREDIT COOPERATIVES ON HOUSEHOLDS‟ WELLBEING IN GURAGE ZONE, SNNP REGIONAL STATE, ETHIOPIA
(Wolkite University, 2019-06) SAMUEL CHIMDI
The purpose of this study was to examine impacts of saving and credit cooperative societies on household wellbeing in Gurage Zone, SNNPR, Ethiopia. Primary and secondary sources were used. The primary data source was collected through direct interviews based on semi structured questionaries’ from 90 treared and 112 controlled group plus discussion with three informant group and extra with staffs of two unions .The study was used a cross- sectional survey research design, and the multistage sampling techniques was employed. The survey data were analyzed through quantitative method, and used descriptive statistics and inferentially statistics logit and propensity score matching econometrics model.The study finding shows age, education, training, loan, interest rate, income sources are the main factors affecting Saving and credit cooperative membership participation. The impact evaluation finding based on household asset accumulation measurements shows Saving and credit cooperative participants were more own asset than non participants. However, there is no significant difference between income and consumption among membership participants and non participants. Finally, researcher recommend SACCOs should seriously work to develop members entrepreneurial talent and promoting members to investing on off-farm and non farm rather than invest on fixed asset activities to improve household wellbeing.