Determinants of Export Performances of Sri Lankan Spices
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Date
2020
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Publisher
Uva Wellassa University of Sri Lanka
Abstract
Sri Lanka remains one of the major five exporters of spices in the world market.
However, the Sri Lankan spices sector is still left behind its exact potential as spices
account only for 1 percent of total exports of Sri Lanka. Therefore, this study examines
the main determinants of the export flow of spices in Sri Lanka. Secondary data from the
first quarter of 2010 to the fourth quarter of 2018 were used. The single equation error
correction technique, which is mostly used to analyse nonstationary data, was employed
for the analysis. Results revealed that the export volume of spices mainly depends on
world GDP (44.9849) and the real wage rate index (-4.0416) in the short run. But, in the
long run, this is mainly dependent on four factors such as Sri Lankan real GDP (-0.6435),
world GDP (11.3477), real wage rate index (2.9925), and the sector productivity (-
2.1437). However, the export value is determined only by the real wage rate index (-
3.3309) in the short run and it mainly depends on the real wage rate index (-2.6150) and
the sector productivity (-2.3803) in long run. The global financial crisis has significantly
affected the export value of the Sri Lankan spices too. The study concludes that the real
wage rate index and sector productivity are the significant factors that determine both the
export volume and value of spices in Sri Lanka. Hence, this study recommends that
policy measures should be taken to improve labour efficiency in the spices sector thereby
reducing the cost of production of the sector.
Keywords: Agricultural exports, Determinants, Exports of Sri Lanka, Spices exports
Description
Keywords
Agriculture, Agricultural exports,, Crop Production