Analysis of the role of East African Community (EAC) in the development of cross-border trade: A case of united republic of Tanzania
Date
2020
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
Mzumbe University
Abstract
This study investigated the role that the EAC has played in the development of the cross-border trade; while focusing on the impact of capital inflows, intra-trade and the effect of inflation to export Performance of Tanzania.The study employed the Gravity Model theoretical framework which used the
gravity equation to describe the size of joint trade flows between two countries. The data was analyzed using the estimation technique – Pooled Mean Group (PMG). The study used a panel of four countries with annual data for the period 2003-2018 using the PMG technique. The outcomes of PMG revealed that FDI, GDP from the Partner States and inflation have all a positive statistically significant relationship with Tanzania exports, imports from the Partner States affects Tanzanian exports negatively except for population variable. The results of the PMG in the short-run have revealed that; changes in the rate of Rwanda’s import has a positive and statistically significant impact to Tanzania exports; the economic growth of Uganda has had a negative statistical significant relationship with Tanzania’s export performance. Otherwise, the positive change in the economic growth of Tanzania statistically increases the rate of export; and that, Burundi and Kenya have no short-run causality with the Tanzania export rate because all the variables are not statistically significant. The discoveries of this study have significant policy inferences to the economy of Tanzania. The biggest constraint to the study was the fact that data were sourced from diverse sources, which are conflicting, thus requiring an in-depth analysis to be conducted first. Future research can expand the number of countries to include other regional integrations that Tanzania is associated with, such as the Southern Africa Development Community (SADC).
Description
A dissertation submitted to Mzumbe University ( DCC ) as a partial fulfilment of the requirements for the award of Masters Degree of Applied Economics and Business (MAEB) of Mzumbe University
Keywords
Capital inflows, Performance, Trade flows, Development, Economic growth
Citation
APA