Determinants of a Firm’s Level of Exports: Evidence from Manufacturing Firms in Uganda
Loading...
Files
Date
2010-05-02
Authors
Aggrey Niringiye
Richard Tuyiragize
Journal Title
Journal ISSN
Volume Title
Publisher
AERC
Abstract
The aim of this study was to establish why Ugandan manufacturing firms decide to
enter the export market. The study built on previous studies by including business
environment factors, factor intensity variables and specific firm characteristics in one
integrative model to investigate the determinants of level of manufactured exports by
firms using tobit and probit estimation procedures. The econometric results showed that
higher levels of capital to labour ratio, firm size, Asian ownership, and being an agrobased and chemical firm are the major determinants of propensity to export. The major
determinants of propensity to export to Africa region were firm size, capital–labour
ratio, skill intensity and being a chemical firm. This compares with firm size and being
an agro-based firm for exporting to the Western Europe region. On the determinants of
the decision to export or not, firm size, Asian ownership, capital–labour ratio, being an
agro–based and chemical firm were the only significant variables. To promote exports,
Uganda should design specific incentives to attract new firms to agro-based and chemical
sectors such as tax holidays. Strategies should also be designed to grow small firms into
large ones, such as loan guarantee schemes for small and medium firms, tax holidays for
joint ventures and mergers, etc. In addition, the government should provide incentives
for capital imports such as maintaining the current zero rating of capital imports. Finally,
policy makers should also design policies aimed at attracting foreign investment such
as increasing economic productivity and political confidence
Description
HF 1612.6 .N57 2010
Keywords
Exports - Uganda