Abstract:
The paper examines the effect of demand and supply side factors on the export performance of
East Africa countries. Mainly, the study focuses on analyzing the relative importance of the two
major factors in determining East African countries’ export performance. The study employed
balanced Panel data set using random effect estimation techniques in order to address the
question. The data covers a period of 15 years (2000 to 2015) for nine East African countries.
The random effect model estimation result indicates that the supply side factors such as GDP of
exporting countries, and trade openness affect positively and significantly the export
performance of East African countries. While foreign direct investment and average institutional
development found to be insignificant for the export development of the region. The study also
indicates that all demand side factor such as membership to world trade organization dummy
(WTO) and real exchange rate except average income of major importing countries have
significant contribution to the export performance of East African countries. Generally, the
result indicates that both the supply and demand side factors equally important in determining
the export performance of East African countries. Based on this among others things, East
African counties should eliminate or at least minimize import and export duties, devaluate their
currency, membership to WTO, creating conducive environment for GDP growth so as to
improve their export performance.
