Trade Liberalization and Disaggregated Import Demand in Uganda

DOI: 10.4236/me.2015.63030   PDF   HTML   XML   2,544 Downloads   3,218 Views  

Abstract

Studies investigating determinants of import demand for Uganda present aggregate findings yet there is a need to disaggregate the findings for specific sectors. This creates a research gap on disaggregated findings of import demand. This research attempts to fill this research gap by establishing determinants of import demand using disaggregated sector level data for consumer, intermediate and capital goods. The study estimates the long-run and short-run import demand elasticities for consumer, intermediate and capital goods over the period (1994 to 2012). The results show that there exists a cointegrating relationship between the disaggregated import demand and the following set of variables; relative import price, GDP per capita, real effective exchange rate, foreign exchange rate reserves and trade openness. The long run elasticity appears more responsive to import demand compared to the short-run elasticity. Importantly the effect of a change in trade openness on the volume of imports is positive, suggesting trade liberalization increases import demand.

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Samuel, G. (2015) Trade Liberalization and Disaggregated Import Demand in Uganda. Modern Economy, 6, 316-337. doi: 10.4236/me.2015.63030.

Conflicts of Interest

The authors declare no conflicts of interest.

References

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