DETERMINANTS OF TRADE IN SERVICE EXPORT OF ETHIOPIA WITHIN THE GLOBAL CONTEXT

Abstract

The purpose of this study is to discuss and examine the determinant of service export in Ethiopia within global context. A gravity trade mode is engaged by using panel data for 29 main service trading partners of Ethiopia covering the period 2000-2013, using FGLS econometric techniques. The estimation result suggests that the service export of the country is highly dependent on both internet users of Ethiopia and trade partners which could result in facilitate it when internet users is further service export by reduced transportation cost and expand customer easily, surprise case since there is existing of infant information technology throughout the country. This paper also assesses and confirms other determinants of the service export sector. The result indicate that GDP per capita of Ethiopia and partners are positively related to the counties export while the Distance between and common language dummy have negative impact on the export. Moreover, the analysis suggests that regulatory policies affecting telecommunications and Internet development indirectly affect service export, further emphasizing the importance of deregulating potentially competitive services in the telecommunications industry.