Abstract
After the adoption of the multicurrency system in 2009 Zimbabwe’s macroeconomic environment stabilized but the new economic order exposed the economy to a crippling liquidity crisis. Exports remain the only sustainable solution to Zimbabwe’s liquidity crisis in the short to medium term given the current sanctions that limits other international capital flows. This study sort to understand the factors that determine Zimbabwean manufacturing firms’ likelihood and intensity to export. The study a was based on panel data from a 19 manufacturing firms listed on the Zimbabwe Stock Exchange over the period 2009 to 2017. The propensity and intensity to export was estimated using the logit and Tobit regression models respectively. Bigger firms and firms that engage in research and development had a high propensity to export. Foreign owned firms and firms that engage in research and development had a high intensity to export, while those with high domestic turnover tended to export less. The appreciation of the USD increased Zimbabwean manufacturing firms’ propensity and intensity to export. We urge the policy makers to design investment laws that attract foreign investors, and managers to prioritize research and development. We also recommend firm managers to take advantage of periods of currency appreciation to recapitalize at a cheaper cost and export more goods since Zimbabwe’s manufacturing production is highly import dependent.
Highlights
After embarking on the fast track land reform program in year 2000 to redress the land distribution imbalances, Zimbabwe’s relations with the Western countries deteriorated rapidly, culminating to the imposition of sanctions on Zimbabwe and withdrawal of balance of payment support
The new economic order exposed the economy to serious liquidity challenges (Mugumisi & Ndhlovu, 2015)
The study was based on secondary firm level data from published financial reports of manufacturing firms listed on the Zimbabwe Stock Exchange
Summary
After embarking on the fast track land reform program in year 2000 to redress the land distribution imbalances, Zimbabwe’s relations with the Western countries deteriorated rapidly, culminating to the imposition of sanctions on Zimbabwe and withdrawal of balance of payment support This triggered an economic meltdown which resulted in an economic contraction of over 40% between year 2000 and 2008 due to a myriad of challenges which included hyper-inflation, company closures, and political crisis. Under the MCS money supply is a function of the performance of the export sector, international capital inflows (foreign direct investment and portfolio investments), diaspora remittances, external lines of credit and donor funds (RBZ, 2012) In this respect the Zimbabwe’s liquidity situation is a function of developments in the external sector
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
