|
Authors:
Reuben Rutto, Obange N, Scholastica Odhiambo, Enock N., Kenya
|
|
Abstract:
Like many other developing countries Kenya has witnessed a stunted GDP growth rate as a result of overreliance on low value agricultural exports. This scenario will be improved if value addition is carried out through production of manufacturing exports based on the principle of comparative advantage within the regional trade blocs such as Common Markets for East and Southern Africa (COMESA) and East African Community (EAC). This is key in achieving Kenya's vision 2030. Manufacturing exports diversifies the economy and increases productivity of capital and labour. Kenya is an active participant in regional trade and the main exporter to both COMESA and EAC. Within the last five years manufactured exports has witnessed a steady growth recording exports worth USD 1.85 within the last five years and out of which 37.4% were Exports to COMESA and EAC. This informs the decision to study manufactured exports to COMESA and EAC as which comprises many countries with different social, institutional, historical and political features and market accession. A number of studies have been done in this area most of which have mostly been on general exports and bilateral trade. For this reason, this reasons this study sort to estimate the effects of human capital development on Kenya's manufactured exports to regional trading blocs. The specific objective is to analyze the effect human capital development on Kenya's manufacturing exports to East African Community and Common Market for East and Southern Africa.
The gravity model was used and Correlational study design was adopted. Panel data was sourced from secondary sources for twenty Kenya's trading partners (EAC and COMESA) for the period 2005-2015 to capture the operationalization and Membership of these trading blocs. Panel data unit root tests was be estimated using Im-Pesaran and Shin, and Levin-Li-Chu tests. Hadri Lagrangian Multiplier (Hadri LM) test was used to choose between Feasible Generalized Least squares and Generalized Equation Estimation methods. Haussmann Taylor method was used to choose between fixed and random effect models.
|
