Journal of Economics and Financial Analysis, 4 (2), pp. 27-44, [2020]
URI: https://ojs.tripaledu.com/jefa/article/view/56/68

Drivers of Horticultural Exports in Kenya


Moi University, Kenya


University of Eldoret, Kenya


DOI: http://dx.doi.org/10.1991/jefa.v4i2.a35

Abstract

This study examines major drivers behind horticultural exports in Kenya for the period 2005-2017. Using co-integration model, the study finds out horticultural exports, interest rate, exchange rate, and inflation rate are co-integrated in long-run. These co-integrated series converge to their long-run equilibrium at a speed of 8.53% on each period at 1% statistically significance level. More specifically, the study explores that the interest rate has negative influence on horticultural exports of Kenya, while inflation and exchange rates have positive impact. Thus, the study recommends that the government in Kenya should reduce interest rates using their monetary policies and stabilize macroeconomic environment in order to increase horticultural exports such as targeted exchange rate through application of foreign reserves adjustments.

Keywords

Horticultural Exports; Co-integration; Error Correction Model.

JEL Classification

C10, E10, E31, F00.

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