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Testing the Convergence of Theory and Empirical Evidence on the Determinants of Export Performance: Lessons from Tanzania

Study by george gandye, 2008

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What determines export performance in Tanzania is the main thrust of this study. This paper briefly surveys literature on the determinants of export performance in general and within the framework of supply capacity and foreign market access various variables are established and tested. Using gravity model a regression analysis is run for the period of thirty years and the result is as anticipated to depict a positive relationship between dependent and the explanatory variable with exception of macro - economic condition and trade fairs. The former reflects the fact that International trade performance demand economic efficiency to ensure long term gains which can partly be derived from better macro economic management and not necessarily the devaluation of currency and the latter depict minimal strategic implementation of trade fairs to promote export oriented products leading to a “fun fairs” kind of trade fair. However, while the relation for other variables remained positive the level of significance has largely been low an indication that the explanatory variable have not sufficiently influenced the dependent variable. Thus, it is notably to recognize that these pillars essential to address the supply side constraints are so embedded and got to be improved in an integrated manner if at all Tanzania is to perform in the external sector given the potential market access.