IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/89002.html
   My bibliography  Save this paper

Trade Balance Analysis in Zimbabwe: Import and Export Examination Using Vector Auto-Regression Model

Author

Listed:
  • Bonga, Wellington G.

Abstract

Zimbabwe, just like many other developing nations have failed to register a positive trade balance for the past decade. Zimbabwe, is then labelled a net-importer or a permanent net-importer, since imports have always been greater than exports. Despite differences in value of imports and exports, quality is also essential to determine the country’s development path. The trade balance is affected by both international and domestic events. Chief exports for Zimbabwe remains primary products which are unprocessed, while the country imports finished products which have been value-added. The study seeks to analyse the trade balance over the years 1980 to 2017, paying particular attention to the periodic trends. The study also explore the relationship between the trade balance components, being imports and exports. The study employed a trend analysis and a statistical analysis to attain its study objectives. The study noted a general rise in both exports and imports, however imports significantly above imports for the entire study period, whether for merchandise or non-merchandise. ADF unit root tests were applied to time series data and variables were found to be integrated of order one. Imports have been found to Granger cause exports while exports Granger cause imports as well. Johansen Cointegration test shows that exports and imports are cointegrated, however using the VAR model, the error correction term was insignificant, discarding the existence of a longrun relationship. Exports levels are affected by its past values and also past values of imports significantly. Imports are also affected by historical exports significantly. Improvement in export policy is critical, value addition to exports, market fetching through regionalism and import substitution is essential to manage the trade balance.

Suggested Citation

  • Bonga, Wellington G., 2018. "Trade Balance Analysis in Zimbabwe: Import and Export Examination Using Vector Auto-Regression Model," MPRA Paper 89002, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:89002
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/89002/1/MPRA_paper_89002.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Shigeyuki HAMORI, 2008. "Trade Balances and the Terms of Trade in G-7 Countries: Penal Cointegration Approach," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 8(2), pages 13-22.
    2. Abdulla S Al-Khulaifi, 2013. "Exports and Imports in Qatar: Evidence from Cointegration and Error Correction Model," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 3(9), pages 1122-1133.
    3. Foresti, Pasquale, 2006. "Testing for Granger causality between stock prices and economic growth," MPRA Paper 2962, University Library of Munich, Germany, revised 2007.
    4. Abdulla S. Al-Khulaifi, 2013. "Exports and Imports in Qatar: Evidence from Cointegration and Error Correction Model," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 3(9), pages 1122-1133, September.
    5. Pierre Perron, 2005. "Dealing with Structural Breaks," Boston University - Department of Economics - Working Papers Series WP2005-017, Boston University - Department of Economics.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Nyoni, Thabani, 2019. "Exports and imports in Zimbabwe: recent insights from artificial neural networks," MPRA Paper 96906, University Library of Munich, Germany.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Antwi-Boateng, Cosmos, 2015. "Is Ghana achieving sustainable trade balance in the participation of international trade? time series assessment for Ghana," MPRA Paper 67268, University Library of Munich, Germany.
    2. Hye, Qazi Muhammad Adnan & Wizarat, Shahida & Lau, Wee-Yeap, 2013. "Trade-led growth hypothesis: An empirical analysis of South Asian countries," Economic Modelling, Elsevier, vol. 35(C), pages 654-660.
    3. K. Krishna REDDY, 2020. "Exports, imports and economic growth in India: An empirical analysis," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania / Editura Economica, vol. 0(4(625), W), pages 323-330, Winter.
    4. Henry, De-Graft Acquah & Lawrence, Acheampong, 2017. "Comparing Parametric And Semiparametric Error Correction Models For Estimation Of Long Run Equilibrium Between Exports And Imports," APSTRACT: Applied Studies in Agribusiness and Commerce, AGRIMBA, vol. 11(1-2), September.
    5. Alice Constance Mensah & Ebenezer Okyere, 2018. "Analysis of Ghana,s Imports and Exports," International Journal of Economics and Financial Research, Academic Research Publishing Group, vol. 4(1), pages 1-6, 01-2018.
    6. Nenavath Sreenu, 2019. "An Econometric Time-Series Analysis of the Dynamic Relationship among Trade, Financial Development and Economic Growth in India," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 9(2), pages 155-165, February.
    7. Haque, M.I., 2015. "Are exports and imports of Saudi Arabia cointegrated? An empirical study," Applied Econometrics and International Development, Euro-American Association of Economic Development, vol. 15(1), pages 111-124.
    8. Juan J. Dolado & Jesús Gonzalo & Laura Mayoral, 2005. "What is What? A Simple Time-Domain Test of Long-memory vs. Structural Breaks," Working Papers 258, Barcelona School of Economics.
    9. Dominique Guegan & Philippe de Peretti, 2011. "Tests of structural changes in conditional distributions with unknown changepoints," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00611932, HAL.
    10. Gabriel Zsurkis & JoÃo Nicolau & Paulo M. M. Rodrigues, 2021. "A Re‐Examination of Inflation Persistence Dynamics in OECD Countries: A New Approach," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 83(4), pages 935-959, August.
    11. Jirak, Moritz, 2012. "Change-point analysis in increasing dimension," Journal of Multivariate Analysis, Elsevier, vol. 111(C), pages 136-159.
    12. Thanabalasingam Vinayagathasan, 2014. "Monetary policy and the real economy: A structural VAR approach for Sri Lanka," Asian Journal of Empirical Research, Asian Economic and Social Society, vol. 4(1), pages 41-64, January.
    13. Jose de Gregorio & Oscar Landerretche & Christopher Neilson, 2007. "Another Pass-Through Bites the Dust? Oil Prices and Inflation," Economía Journal, The Latin American and Caribbean Economic Association - LACEA, vol. 0(Spring 20), pages 155-208, January.
    14. Monojit Chatterji & Homagni Choudhury, 2010. "The Changing Inter-Industry Wage Structure of the Organised Manufacturing Sector in India, 1973-74 to 2003-04," Dundee Discussion Papers in Economics 244, Economic Studies, University of Dundee.
    15. Travaglini, Guido, 2007. "The U.S. Dynamic Taylor Rule With Multiple Breaks, 1984-2001," MPRA Paper 3419, University Library of Munich, Germany, revised 15 Jun 2007.
    16. Robert Socha & Piotr Wdowiński, 2018. "Tendencje zmian cen na światowym rynku ropy naftowej po 2000 roku," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 1, pages 103-135.
    17. Ekaterini Panopoulou, 2006. "PPP over a century: Co-integration and structural change," Economics Department Working Paper Series n1650306, Department of Economics, National University of Ireland - Maynooth.
    18. Muhammad Shafiullah & Faridul Islam & Ravinthirakumaran Navaratnam, 2020. "The Harberger–Laursen–Metzler effect: evidence from five SAARC countries," Empirical Economics, Springer, vol. 58(4), pages 1749-1777, April.
    19. Daniel Waldenstrom & Bruno S. Frey, 2006. "Using Markets to Measure Pre-War Threat Assessments: The Nordic Countries facing World War II," CREMA Working Paper Series 2006-27, Center for Research in Economics, Management and the Arts (CREMA).
    20. Konstantinos Vergos & Benjamin Wanger, 2019. "Evaluating interdependencies in African markets A VECM approach," Bulletin of Applied Economics, Risk Market Journals, vol. 6(1), pages 65-85.

    More about this item

    Keywords

    Trade balance; Trade deficit; Trade surplus; Exports; Imports; Cointegration; Vector Auto-Regression; Granger Causality; Zimbabwe;
    All these keywords.

    JEL classification:

    • C01 - Mathematical and Quantitative Methods - - General - - - Econometrics
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F15 - International Economics - - Trade - - - Economic Integration
    • F18 - International Economics - - Trade - - - Trade and Environment
    • F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • F62 - International Economics - - Economic Impacts of Globalization - - - Macroeconomic Impacts

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:89002. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.