Determinants of Horticulture Export Production: Evidence from Ethiopian Agriculture Sector Using Panel Data Approach

Abstract

The study identified determining variables for the export production of horticulture firms and estimated it under the framework of the Cobb-Douglas production function. The study used secondary data from a panel of 64 horticulture firms from 2011 to 2017. The model of the production function is estimated with OLS, fixed, and random panel fixed effect models. Using the Hausman test, the fixed effect model is chosen and has the following major findings: fertilizer, capital, labor, and credit are statistically significant variables that positively influence the export performance of the horticulture firms. The finding draws attention to some key areas of policy relevance in which the policy that promotes industrial linkage and producing competitive products in the global market, challenges faced by horticulture firms, investing in research and development issues to minimize import items, and focusing on industrialized led agriculture are discussed.