Abstract
This paper examines the export demand function of Malawi tobacco using panel data from 1997 to 2019. It estimates the relationship of tobacco quantity exported with Malawi’s export price, competitor’s export price, Gross Domestic Product (GDP), Real effective exchange rate (REER) as well as the impact of the World Health Organization’s (WHO) Framework Convention on Tobacco Control (FCTC). A double log fixed effects model with driscoll- kraay standard errors as well as fixed effects model with Least Square Dummy Variables (LSDV) model was used for empirical estimation. The empirical results confirmed that there exists a significant relationship among Malawi tobacco export demand, trade partner’s real income and export price. Furthermore, REER was elastic, while own price and cross price elasticities were less than zero. The results indicated that Malawi should take advantage of the high incomes of the tobacco importing countries to enhance international market share.
Highlights
Malawi’s economy is predominantly driven by the agricultural sector which accounts for one third of the Gross Domestic Product (GDP) and nearly 80 percent of the country’s employment for decades
This paper examines the export demand function of Malawi tobacco using panel data from 1997 to 2019
The empirical results confirmed that there exists a significant relationship among Malawi tobacco export demand, trade partner’s real income and export price
Summary
Malawi’s economy is predominantly driven by the agricultural sector which accounts for one third of the GDP and nearly 80 percent of the country’s employment for decades. Agriculture is considered the engine of Malawi’s economic growth, contributing more than 80 percent of the country’s total exports (FAO, 2015). The tobacco sector plays an important role in the agricul-. Exports play a vital role in determining the national income of a country (Sultanuzzaman et al, 2019). In many developing countries like Malawi, the role of exports is significant for the country’s economic growth by generating foreign exchange necessary to finance their imports, which are crucial for capital formation (Senhadji & Montenegro, 1999). The top 10 importing countries were Belgium, Germany, Russia Federation, Netherlands, United States of America, Poland, republic of Korea, Turkey, China and Armenia
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
