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Analysis of the determinants of trade balance:case of tanzania

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Analysis of the determinants of trade balance:case of tanzania
International Journal of Business and Economics Research
2013; 2(6): 134-141
Published online November 20, 2013 (http://www.sciencepublishinggroup.com/j/ijber) doi: 10.11648/j.ijber.20130206.13

Analysis of the determinants of trade balance: Case study of Tanzania
Moses Joseph Shawa*, Yao Shen
School of Economics, Shanghai University, Shanghai, China

Email address: shamoses2002@yahoo.com(M. J. Shawa)

To cite this article:
Moses Joseph Shawa, Yao Shen. Analysis of the Determinants of Trade Balance: Case Study of Tanzania. International Journal of
Business and Economics Researc. Vol. 2, No. 6, 2013, pp. 134-141. doi: 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.
Keywords: Trade Balance(TB), Foreign


References: [4] Edward nienga (2010) the determinants of trade balance in [5] Fuller.(1979).Dickey,D.A.andW.A.Fuller(1979),“Distributio [7] Har wai-mum, Ng yuen-ling, Tan Geoi-Mei (2008) Real [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 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 [12] Magee, S.P. (1973), ‘Currency Contracts, Pass-through, and Devaluation’, Brookings, Papers on Economic Activity; 1, pp. [13] Peter W. and Sarah T. (2006) the trade balance effects of U.S. [14] Phillips–Perron. (1988). Testing for a Unit Root in Time Series Regression" 141 [15] Rose and Yellen (1989, p [16] Sayuni mbayani (2006) Determinants of trade balance in Tanzania, A research paper towards the fulfillment of masters (2010).The Determinants of Pakistan’s Trade Balance: An ARDL Co integration Approach Economics 15: 1 (summer 2010): pp. 1-26.
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