The Effect of Macroeconomic Variables on Industry Sector Output Growth of Ethiopia

Adisu Abebaw

doi:doi:10.11648/j.ijber.20190806.11

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The Effect of Macroeconomic Variables on Industry Sector Output Growth of Ethiopia

Adisu Abebaw

Published in International Journal of Business and Economics Research (Volume 8, Issue 6)

Received: 9 July 2019 Accepted: 30 July 2019 Published: 20 September 2019

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Abstract

Industrialization plays a key role in the process of a nation’s economic development. The experience of the developed world revealed that industrialization significantly increased their productivity and changed the economic structure. Mainly with the context of reoccurring unstable macroeconomic performance in Ethiopia, analyzing the effect of macroeconomic variables on industry sector output growth is a proper way to design suitable industrial policies. Therefore, this study aimed to examine the effect of some macro-economic variables on the industry output growth in Ethiopia. To do so the study used a time series data ranging from 1991 up to 2018 from Ministry of Finance and Economic Cooperation of Ethiopia. The study also used Augmented Dickey-Fuller (ADF) and the Phillip-Perron (PP) unit root tests of stationary, Auto Regressive Distributed Lag (ARDL) bound test to co-integration and error correction model. Accordingly the study confirmed the existence of a long-run relationship between industrial output growth and macroeconomic variables. Macroeconomic variables such as, lending rate, inflation rate and trade balance found to be affecting the industrial sector output growth negatively, positively and negatively, respectively in the long run. Therefore, the government has to keep lending rate to the level that could be amenable for firms and maintaining the trade balance; via manipulating the export and import.

Published in	International Journal of Business and Economics Research (Volume 8, Issue 6)
DOI	10.11648/j.ijber.20190806.11
Page(s)	325-338
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2019. Published by Science Publishing Group

Keywords

Bound Test, Industrial Output, Macroeconomic Variables, Lending Rate

References

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APA Style

Adisu Abebaw. (2019). The Effect of Macroeconomic Variables on Industry Sector Output Growth of Ethiopia. International Journal of Business and Economics Research, 8(6), 325-338. https://doi.org/10.11648/j.ijber.20190806.11

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ACS Style

Adisu Abebaw. The Effect of Macroeconomic Variables on Industry Sector Output Growth of Ethiopia. Int. J. Bus. Econ. Res. 2019, 8(6), 325-338. doi: 10.11648/j.ijber.20190806.11

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Adisu Abebaw. The Effect of Macroeconomic Variables on Industry Sector Output Growth of Ethiopia. Int J Bus Econ Res. 2019;8(6):325-338. doi: 10.11648/j.ijber.20190806.11

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@article{10.11648/j.ijber.20190806.11,
  author = {Adisu Abebaw},
  title = {The Effect of Macroeconomic Variables on Industry Sector Output Growth of Ethiopia},
  journal = {International Journal of Business and Economics Research},
  volume = {8},
  number = {6},
  pages = {325-338},
  doi = {10.11648/j.ijber.20190806.11},
  url = {https://doi.org/10.11648/j.ijber.20190806.11},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijber.20190806.11},
  abstract = {Industrialization plays a key role in the process of a nation’s economic development. The experience of the developed world revealed that industrialization significantly increased their productivity and changed the economic structure. Mainly with the context of reoccurring unstable macroeconomic performance in Ethiopia, analyzing the effect of macroeconomic variables on industry sector output growth is a proper way to design suitable industrial policies. Therefore, this study aimed to examine the effect of some macro-economic variables on the industry output growth in Ethiopia. To do so the study used a time series data ranging from 1991 up to 2018 from Ministry of Finance and Economic Cooperation of Ethiopia. The study also used Augmented Dickey-Fuller (ADF) and the Phillip-Perron (PP) unit root tests of stationary, Auto Regressive Distributed Lag (ARDL) bound test to co-integration and error correction model. Accordingly the study confirmed the existence of a long-run relationship between industrial output growth and macroeconomic variables. Macroeconomic variables such as, lending rate, inflation rate and trade balance found to be affecting the industrial sector output growth negatively, positively and negatively, respectively in the long run. Therefore, the government has to keep lending rate to the level that could be amenable for firms and maintaining the trade balance; via manipulating the export and import.},
 year = {2019}
}

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TY  - JOUR
T1  - The Effect of Macroeconomic Variables on Industry Sector Output Growth of Ethiopia
AU  - Adisu Abebaw
Y1  - 2019/09/20
PY  - 2019
N1  - https://doi.org/10.11648/j.ijber.20190806.11
DO  - 10.11648/j.ijber.20190806.11
T2  - International Journal of Business and Economics Research
JF  - International Journal of Business and Economics Research
JO  - International Journal of Business and Economics Research
SP  - 325
EP  - 338
PB  - Science Publishing Group
SN  - 2328-756X
UR  - https://doi.org/10.11648/j.ijber.20190806.11
AB  - Industrialization plays a key role in the process of a nation’s economic development. The experience of the developed world revealed that industrialization significantly increased their productivity and changed the economic structure. Mainly with the context of reoccurring unstable macroeconomic performance in Ethiopia, analyzing the effect of macroeconomic variables on industry sector output growth is a proper way to design suitable industrial policies. Therefore, this study aimed to examine the effect of some macro-economic variables on the industry output growth in Ethiopia. To do so the study used a time series data ranging from 1991 up to 2018 from Ministry of Finance and Economic Cooperation of Ethiopia. The study also used Augmented Dickey-Fuller (ADF) and the Phillip-Perron (PP) unit root tests of stationary, Auto Regressive Distributed Lag (ARDL) bound test to co-integration and error correction model. Accordingly the study confirmed the existence of a long-run relationship between industrial output growth and macroeconomic variables. Macroeconomic variables such as, lending rate, inflation rate and trade balance found to be affecting the industrial sector output growth negatively, positively and negatively, respectively in the long run. Therefore, the government has to keep lending rate to the level that could be amenable for firms and maintaining the trade balance; via manipulating the export and import.
VL  - 8
IS  - 6
ER  -

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Author Information

Adisu Abebaw

Department of Economics, College of Business and Economics, Salale University, Fiche, Oromia Region, Ethiopia

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APA Style

Adisu Abebaw. (2019). The Effect of Macroeconomic Variables on Industry Sector Output Growth of Ethiopia. International Journal of Business and Economics Research, 8(6), 325-338. https://doi.org/10.11648/j.ijber.20190806.11

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ACS Style

Adisu Abebaw. The Effect of Macroeconomic Variables on Industry Sector Output Growth of Ethiopia. Int. J. Bus. Econ. Res. 2019, 8(6), 325-338. doi: 10.11648/j.ijber.20190806.11

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AMA Style

Adisu Abebaw. The Effect of Macroeconomic Variables on Industry Sector Output Growth of Ethiopia. Int J Bus Econ Res. 2019;8(6):325-338. doi: 10.11648/j.ijber.20190806.11

Copy | Download

@article{10.11648/j.ijber.20190806.11,
  author = {Adisu Abebaw},
  title = {The Effect of Macroeconomic Variables on Industry Sector Output Growth of Ethiopia},
  journal = {International Journal of Business and Economics Research},
  volume = {8},
  number = {6},
  pages = {325-338},
  doi = {10.11648/j.ijber.20190806.11},
  url = {https://doi.org/10.11648/j.ijber.20190806.11},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijber.20190806.11},
  abstract = {Industrialization plays a key role in the process of a nation’s economic development. The experience of the developed world revealed that industrialization significantly increased their productivity and changed the economic structure. Mainly with the context of reoccurring unstable macroeconomic performance in Ethiopia, analyzing the effect of macroeconomic variables on industry sector output growth is a proper way to design suitable industrial policies. Therefore, this study aimed to examine the effect of some macro-economic variables on the industry output growth in Ethiopia. To do so the study used a time series data ranging from 1991 up to 2018 from Ministry of Finance and Economic Cooperation of Ethiopia. The study also used Augmented Dickey-Fuller (ADF) and the Phillip-Perron (PP) unit root tests of stationary, Auto Regressive Distributed Lag (ARDL) bound test to co-integration and error correction model. Accordingly the study confirmed the existence of a long-run relationship between industrial output growth and macroeconomic variables. Macroeconomic variables such as, lending rate, inflation rate and trade balance found to be affecting the industrial sector output growth negatively, positively and negatively, respectively in the long run. Therefore, the government has to keep lending rate to the level that could be amenable for firms and maintaining the trade balance; via manipulating the export and import.},
 year = {2019}
}

Copy | Download

TY  - JOUR
T1  - The Effect of Macroeconomic Variables on Industry Sector Output Growth of Ethiopia
AU  - Adisu Abebaw
Y1  - 2019/09/20
PY  - 2019
N1  - https://doi.org/10.11648/j.ijber.20190806.11
DO  - 10.11648/j.ijber.20190806.11
T2  - International Journal of Business and Economics Research
JF  - International Journal of Business and Economics Research
JO  - International Journal of Business and Economics Research
SP  - 325
EP  - 338
PB  - Science Publishing Group
SN  - 2328-756X
UR  - https://doi.org/10.11648/j.ijber.20190806.11
AB  - Industrialization plays a key role in the process of a nation’s economic development. The experience of the developed world revealed that industrialization significantly increased their productivity and changed the economic structure. Mainly with the context of reoccurring unstable macroeconomic performance in Ethiopia, analyzing the effect of macroeconomic variables on industry sector output growth is a proper way to design suitable industrial policies. Therefore, this study aimed to examine the effect of some macro-economic variables on the industry output growth in Ethiopia. To do so the study used a time series data ranging from 1991 up to 2018 from Ministry of Finance and Economic Cooperation of Ethiopia. The study also used Augmented Dickey-Fuller (ADF) and the Phillip-Perron (PP) unit root tests of stationary, Auto Regressive Distributed Lag (ARDL) bound test to co-integration and error correction model. Accordingly the study confirmed the existence of a long-run relationship between industrial output growth and macroeconomic variables. Macroeconomic variables such as, lending rate, inflation rate and trade balance found to be affecting the industrial sector output growth negatively, positively and negatively, respectively in the long run. Therefore, the government has to keep lending rate to the level that could be amenable for firms and maintaining the trade balance; via manipulating the export and import.
VL  - 8
IS  - 6
ER  -

Copy | Download