Determinants Of Export Performance And Employment Of Labor In Large And Medium Scale Manufacturing Industry Of Ethiopia An Ardl Cointegration Approach

The objective of this study is to investigate the determinants of export performance andrnemployment of labor in large and medium scale manufacturing industry of Ethiopia using a timernseries data from 1978/79 to 2012/13. In this study, effort has been made to identify the long run andrnshort run determinants of export performance and labor employment in large and medium scalernmanufacturing industry of Ethiopia using an ARDL bounds testing approach and ECM to capturernboth long run and short run relationships. The estimated results for the determinants of exportrnperformance revealed that the market size of the home economy, Europe and domesticrninfrastructure are positive and statistically significant determinants of export, while the marketrnsize of Africa (excluding Ethiopia) and real effective exchange rates (REER) have a negativernimpact on export of large and medium scale manufacturing industry of Ethiopia. But the marketrnsize of the United States of America and the Far East are found statistically insignificant.rnHowever, in the short run, the market size of the United States of America found statisticallyrnsignificant which goes with the African Growth opportunity act though the market size of FarrnEast still insignificant. The market size of the home economy and domestic infrastructure arernpositively significant not only in the long run, but also in the short run and the market size of Africarnand REER are also statistically insignificant in the short run. The speed of adjustment has the valuern0.7959 with a negative sign, which showed the convergence of the export model towards its longrnrun equilibrium.rnAs for the, determinants of labor employment, the result shows that the skills of employee’s, exportrnand real lending interest rate are both statistically significant in the short and long run, while thernreal wage rate has a significant effect only in the short run. Furthermore, both the value addedrnper person engaged, a measure of labor productivity, and efficiency are statistically insignificantrnboth in the long run and short run. The speed of adjustment in the employment model is 0.4554.rnFinally, the major policy implication of this study is, prioritizing investments to words capitalrngoods and enhancing skill capacity of workers through short and long term trainings by thernmanufacturers for the employee and empowers the managers

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