Analysis of the Determinants of Trade Balance: Case Study of Tanzania

Moses Joseph Shawa; Yao Shen

doi:doi:10.11648/j.ijber.20130206.13

| Peer-Reviewed

Analysis of the Determinants of Trade Balance: Case Study of Tanzania

Moses Joseph Shawa, Yao Shen

Published in International Journal of Business and Economics Research (Volume 2, Issue 6)

Received: 17 September 2013 Published: 20 November 2013

Views: Downloads:

Download PDF

Share This Article

Twitter
Linked In
Facebook

Abstract

The study focuses on the Analysis of the Main determinants that have an impact on trade balance. Specifically this study focus on the main cause of Trade deficit in Tanzania by analyzing the impact of Foreign Direct Investment(FDI),Human Capital Development(HCD),Household Consumption Expenditure(HCEXP), Government Expenditure (GEXP),Inflation (INF),Natural Resources Availability (NRA),Real Exchange Rate (REX) and Foreign Income(WY) and Trade Liberization (TLB) etc.In this study The Ordinary Least Square method (OLS) under the E-View 7.1 software has been used for the econometric analysis with a sample period spanning from 1980-2012. The literature reviews of the previous researchers have the mixed results on the factors in questions. However this study tried to use more variables that have rarely been explored specifically in Tanzania and found out that the main influencing factors for the case of Tanzania are Foreign Direct Investment(FDI),Human Capital Development (HCD),Household Consumption Expenditure(HCEXP), Government Expenditure (GEXP),Inflation (INF),Natural Resources Availability (NRA),Foreign Income(WY) and Trade Liberization(TLB) so suggested policy measures should focus on them to reduce the trade deficit in the Tanzanian economy.

Published in	International Journal of Business and Economics Research (Volume 2, Issue 6)
DOI	10.11648/j.ijber.20130206.13
Page(s)	134-141
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), 2013. Published by Science Publishing Group

Keywords

Trade Balance(TB), Foreign Direct Investment(FDI), Human Capital Development(HCD), Natural Resources Availability (NRA), Foreign Income(WY), Trade Liberization(TLB), Tanzania

References

[1]	Bahmani-Oskooee, M. (2001) Nominal and real effective exchange rates of Middle Eastern countries and their trade performance. Applied Economics, 33, 103-111
[2]	Bahmani-Oskooee M. and Brooks T.J., (1999) Bilateral J-curve between US and her trading partners,Weltwirtschaftliches Archive, 135(1), 156-165.
[3]	Dickey, F. (1979). Distribution of the Estimators for Autoregressive time series with Unit Roots. Journal of American Statistical Associations.
[4]	Edward nienga (2010) the determinants of trade balance in Kenya; an empirical analysis; 1970-2010.
[5]	Fuller.(1979).Dickey,D.A.andW.A.Fuller(1979),"Distribution of the Estimators for Autoregressive Time Series with a Unit Root. Journal of the American Statistical Association, 74, p. 427–431.
[6]	Festus O. Egwaikhide (2002) Effects of Budget Deficit on Trade Balance in Nigeria: A Simulation Exercise; African Development Review volume 11, Issue 2, pages 265–289.
[7]	Har wai-mum, Ng yuen-ling, Tan Geoi-Mei (2008) Real exchange rate and trade balance Relationship: An Empirical study on Malaysia.
[8]	Imam Sugema (2005) The Determinants of Trade Balance and Adjustment to the Crisis in Indonesia. Paper No. 0508.
[9]	Korap, Levant (2011): An empirical model for the Turkish trade balance: new evidence from ARDL bounds testing analyses. Published in:Istanbul University Department of Economics Econometrics and Statistics, Vol. 14, (2011): pp. 38-61.
[10]	Lal, Anil K. and Lowinger, Thomas C. (2001) "J -Curve: Evidence from East Asia," manuscript presented at the 40th Annual Meeting of the Western Regional Science Association February 2001 in Palm Springs, CA.
[11]	M.zakir saadullar k., M.ismail h. (2012) Determinants of Trade Balance of Bangladesh: A Dynamic Panel Data Analysis. Bangladesh Development Studies Vol. XXXV, June 2012, No. 2.
[12]	Magee, S.P. (1973), ‘Currency Contracts, Pass-through, and Devaluation’, Brookings, Papers on Economic Activity; 1, pp. 303-23.
[13]	Peter W. and Sarah T. (2006) the trade balance effects of U.S. foreign direct investment in Mexico.
[14]	Phillips–Perron. (1988). Testing for a Unit Root in Time Series Regression". Biometrika, 75, 335–346.
[15]	Rose and Yellen (1989, p. 58) an empirical analysis of Korea's trade imbalances with the US and Japan.
[16]	Sayuni mbayani (2006) Determinants of trade balance in Tanzania, A research paper towards the fulfillment of masters of Arts degree in economic policy management (PPT),Makerere University.
[17]	Waliullah, Mehmood k.k, Rehmatullah.K and wekeel.k. (2010).The Determinants of Pakistan’s Trade Balance: An ARDL Co integration Approach. The Lahore Journal of Economics 15: 1 (summer 2010): pp. 1-26.

Cite This Article

Plain Text BibTeX RIS

APA Style

Moses Joseph Shawa, Yao Shen. (2013). Analysis of the Determinants of Trade Balance: Case Study of Tanzania. International Journal of Business and Economics Research, 2(6), 134-141. https://doi.org/10.11648/j.ijber.20130206.13

Copy | Download

ACS Style

Moses Joseph Shawa; Yao Shen. Analysis of the Determinants of Trade Balance: Case Study of Tanzania. Int. J. Bus. Econ. Res. 2013, 2(6), 134-141. doi: 10.11648/j.ijber.20130206.13

Copy | Download

AMA Style

Moses Joseph Shawa, Yao Shen. Analysis of the Determinants of Trade Balance: Case Study of Tanzania. Int J Bus Econ Res. 2013;2(6):134-141. doi: 10.11648/j.ijber.20130206.13

Copy | Download

@article{10.11648/j.ijber.20130206.13,
  author = {Moses Joseph Shawa and Yao Shen},
  title = {Analysis of the Determinants of Trade Balance: Case Study of Tanzania},
  journal = {International Journal of Business and Economics Research},
  volume = {2},
  number = {6},
  pages = {134-141},
  doi = {10.11648/j.ijber.20130206.13},
  url = {https://doi.org/10.11648/j.ijber.20130206.13},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijber.20130206.13},
  abstract = {The study focuses on the Analysis of the Main determinants that have an impact on trade balance. Specifically this study focus on the main cause of Trade deficit in Tanzania by analyzing the impact of Foreign Direct Investment(FDI),Human Capital Development(HCD),Household Consumption Expenditure(HCEXP), Government Expenditure (GEXP),Inflation (INF),Natural Resources Availability (NRA),Real Exchange Rate (REX) and Foreign Income(WY) and Trade Liberization (TLB) etc.In this study The Ordinary Least Square method (OLS) under the E-View 7.1 software has been used for the econometric analysis with a sample period spanning from 1980-2012. The literature reviews of the previous researchers have the mixed results on the factors in questions. However this study tried to use more variables that have rarely been explored specifically in Tanzania and found out that the main influencing factors for the case of Tanzania are Foreign Direct Investment(FDI),Human Capital Development (HCD),Household Consumption Expenditure(HCEXP), Government Expenditure (GEXP),Inflation (INF),Natural Resources Availability (NRA),Foreign Income(WY) and Trade Liberization(TLB) so suggested policy measures should focus on them to reduce the trade deficit in the Tanzanian economy.},
 year = {2013}
}

Copy | Download

TY  - JOUR
T1  - Analysis of the Determinants of Trade Balance: Case Study of Tanzania
AU  - Moses Joseph Shawa
AU  - Yao Shen
Y1  - 2013/11/20
PY  - 2013
N1  - https://doi.org/10.11648/j.ijber.20130206.13
DO  - 10.11648/j.ijber.20130206.13
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  - 134
EP  - 141
PB  - Science Publishing Group
SN  - 2328-756X
UR  - https://doi.org/10.11648/j.ijber.20130206.13
AB  - The study focuses on the Analysis of the Main determinants that have an impact on trade balance. Specifically this study focus on the main cause of Trade deficit in Tanzania by analyzing the impact of Foreign Direct Investment(FDI),Human Capital Development(HCD),Household Consumption Expenditure(HCEXP), Government Expenditure (GEXP),Inflation (INF),Natural Resources Availability (NRA),Real Exchange Rate (REX) and Foreign Income(WY) and Trade Liberization (TLB) etc.In this study The Ordinary Least Square method (OLS) under the E-View 7.1 software has been used for the econometric analysis with a sample period spanning from 1980-2012. The literature reviews of the previous researchers have the mixed results on the factors in questions. However this study tried to use more variables that have rarely been explored specifically in Tanzania and found out that the main influencing factors for the case of Tanzania are Foreign Direct Investment(FDI),Human Capital Development (HCD),Household Consumption Expenditure(HCEXP), Government Expenditure (GEXP),Inflation (INF),Natural Resources Availability (NRA),Foreign Income(WY) and Trade Liberization(TLB) so suggested policy measures should focus on them to reduce the trade deficit in the Tanzanian economy.
VL  - 2
IS  - 6
ER  -

Copy | Download

Author Information

Moses Joseph Shawa

School of Economics, Shanghai University, Shanghai, China
Yao Shen

School of Economics, Shanghai University, Shanghai, China

Download PDF

Sections

Plain Text BibTeX RIS

APA Style

Moses Joseph Shawa, Yao Shen. (2013). Analysis of the Determinants of Trade Balance: Case Study of Tanzania. International Journal of Business and Economics Research, 2(6), 134-141. https://doi.org/10.11648/j.ijber.20130206.13

Copy | Download

ACS Style

Moses Joseph Shawa; Yao Shen. Analysis of the Determinants of Trade Balance: Case Study of Tanzania. Int. J. Bus. Econ. Res. 2013, 2(6), 134-141. doi: 10.11648/j.ijber.20130206.13

Copy | Download

AMA Style

Moses Joseph Shawa, Yao Shen. Analysis of the Determinants of Trade Balance: Case Study of Tanzania. Int J Bus Econ Res. 2013;2(6):134-141. doi: 10.11648/j.ijber.20130206.13

Copy | Download

@article{10.11648/j.ijber.20130206.13,
  author = {Moses Joseph Shawa and Yao Shen},
  title = {Analysis of the Determinants of Trade Balance: Case Study of Tanzania},
  journal = {International Journal of Business and Economics Research},
  volume = {2},
  number = {6},
  pages = {134-141},
  doi = {10.11648/j.ijber.20130206.13},
  url = {https://doi.org/10.11648/j.ijber.20130206.13},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.ijber.20130206.13},
  abstract = {The study focuses on the Analysis of the Main determinants that have an impact on trade balance. Specifically this study focus on the main cause of Trade deficit in Tanzania by analyzing the impact of Foreign Direct Investment(FDI),Human Capital Development(HCD),Household Consumption Expenditure(HCEXP), Government Expenditure (GEXP),Inflation (INF),Natural Resources Availability (NRA),Real Exchange Rate (REX) and Foreign Income(WY) and Trade Liberization (TLB) etc.In this study The Ordinary Least Square method (OLS) under the E-View 7.1 software has been used for the econometric analysis with a sample period spanning from 1980-2012. The literature reviews of the previous researchers have the mixed results on the factors in questions. However this study tried to use more variables that have rarely been explored specifically in Tanzania and found out that the main influencing factors for the case of Tanzania are Foreign Direct Investment(FDI),Human Capital Development (HCD),Household Consumption Expenditure(HCEXP), Government Expenditure (GEXP),Inflation (INF),Natural Resources Availability (NRA),Foreign Income(WY) and Trade Liberization(TLB) so suggested policy measures should focus on them to reduce the trade deficit in the Tanzanian economy.},
 year = {2013}
}

Copy | Download

TY  - JOUR
T1  - Analysis of the Determinants of Trade Balance: Case Study of Tanzania
AU  - Moses Joseph Shawa
AU  - Yao Shen
Y1  - 2013/11/20
PY  - 2013
N1  - https://doi.org/10.11648/j.ijber.20130206.13
DO  - 10.11648/j.ijber.20130206.13
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  - 134
EP  - 141
PB  - Science Publishing Group
SN  - 2328-756X
UR  - https://doi.org/10.11648/j.ijber.20130206.13
AB  - The study focuses on the Analysis of the Main determinants that have an impact on trade balance. Specifically this study focus on the main cause of Trade deficit in Tanzania by analyzing the impact of Foreign Direct Investment(FDI),Human Capital Development(HCD),Household Consumption Expenditure(HCEXP), Government Expenditure (GEXP),Inflation (INF),Natural Resources Availability (NRA),Real Exchange Rate (REX) and Foreign Income(WY) and Trade Liberization (TLB) etc.In this study The Ordinary Least Square method (OLS) under the E-View 7.1 software has been used for the econometric analysis with a sample period spanning from 1980-2012. The literature reviews of the previous researchers have the mixed results on the factors in questions. However this study tried to use more variables that have rarely been explored specifically in Tanzania and found out that the main influencing factors for the case of Tanzania are Foreign Direct Investment(FDI),Human Capital Development (HCD),Household Consumption Expenditure(HCEXP), Government Expenditure (GEXP),Inflation (INF),Natural Resources Availability (NRA),Foreign Income(WY) and Trade Liberization(TLB) so suggested policy measures should focus on them to reduce the trade deficit in the Tanzanian economy.
VL  - 2
IS  - 6
ER  -

Copy | Download