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Determinants of agricultural exports in Somalia: the impacts of exchange rates, foreign direct investment, and institutional quality

Abdi, AbdikafiHassan (2025) Determinants of agricultural exports in Somalia: the impacts of exchange rates, foreign direct investment, and institutional quality. COGENT ECONOMICS & FINANCE.

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Abstract

Globally,theexportationofagriculturalproductsplaysacriticalroleindrivingeconomic growthandstability,oftenactingasasubstantialcontributortogrossdomesticproduct (GDP),employment,andforeignexchangeearningsinagrarianeconomies.Asavitalpil
larofmanydevelopingcountries’economies, theagricultural sector’sexportdynamics haveremainedunderstudied,particularlyinintegratingclimatic,economic,andinstitu
tional-relatedfactors.Thus, thisstudyexploresthedeterminantsofagriculturalexports inSomaliabetween1985and2017.WhiletheevidencefromtheARDLbounds-testing
cointegrationanalysis indicates thatprecipitationimprovesagricultural exports inthe
long-run,theroleofagriculturalproductionwasinsignificant.Theanalysisindicatesthat
currencydepreciationcanboostexportcompetitiveness inthelong-run,whereascur
rencydepreciationmay leadtoreducedexports intheshort-run.Moreover, short-run
domestic investmentspositively impact exports, but this effect diminishes over the
long-run. Remarkably, institutionalqualityandFDI inflowsareconsistentlyidentifiedas
significantenhancersofagriculturalexports. Inaddition, theGrangercausalityanalysis
indicatesthatexchangerates, institutionalquality,andFDI inflowsunidirectionallypre
dictagriculturalexports. Followingtheoutcomesof thisexploration, thestudyrecom
mends enhancing rainwater harvesting and irrigation systems, focusing on value additionandmarketdiversification,stabilizingcurrencyforcompetitiveadvantage,and
improvinginstitutionalqualitybystreamliningFDIpolicies.

Item Type: Article
Subjects: A General Works > AM Museums (General). Collectors and collecting (General)
Divisions: Faculty of Economics
Depositing User: Unnamed user with email crd@smiad.edu.so
Date Deposited: 10 Sep 2025 15:16
Last Modified: 10 Sep 2025 15:16
URI: https://repository.simad.edu.so/id/eprint/93

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