Determinants of Agricultural Export Trade: Case of Fresh Pineapple Exports from Ghana

Abstract

Aims: This study is purposed on informing future trade policy decisions on how the fresh pineapple export industry of Ghana can be revitalized following declines in both volumes and value of exports since the year 2004. To achieve this, effort is made to identify and assess the magnitude and effects of key determinants of fresh pineapple exports from Ghana for the period 1984-2009 Study Design: The study involves separate consideration of value and volume of exports as explained variables, and sourcing of ways by which beneficial implications noted could be maximized for both variables, while minimizing adverse ones in the process. Place and Duration of Study: This study solely involves the use of secondary data and own-computations on volume and value of pineapple exports, production, domestic demand, export price faced by exporters, terms of trade index of exports, real effective exchange rate, comparative export performance index and net inflow of foreign direct investment Methodology: Separate regression with value and volumes of exports as explained variables were estimated with the Ordinary Least Squares estimator, and tested for appropriate standard Gaussian assumptions, appropriateness of specification and stability of coefficients Results: The results show that Ghana’s fresh pineapple export industry has competitive advantage and is more price-driven than volume driven. Both volume and value of exports have positive association with production, openness to trade, and the index of competitiveness. Both however have an inverse association with domestic demand and net inflow of foreign direct investment. In as much as the value of exports increases with export price faced by exporters, the response for volumes exported is not significant. The effect of lagged volume of exports on both explained variables is as well not significant. Conclusion: Reviving the fresh pineapple export industry requires increasing production (to be achieved through creation of favorable production conditions), improvement in quality of produce exported, improvement in the country’s openness to trade, and minimization or avoidance of domestic market capturing and tariff jumping types of foreign direct investments.