Determinants of export performance in Somalia

Somalia's economy categorized by the old-style sector and the little modern urban industry generates its trade flow. Agriculture is an important sector of the economy. It contributes more than 65 per cent of the national GDP and creates many employees in the workforce. However, Somalia's export sector is very fragile and not functioning well. The general objective of the study is to discover the determinants of export performance in Somalia. This paper summarizes the determinants of export performance in Somalia by using secondary time series data in a range of periods from 1991 to 2020 for different sources such as world development indicators and SESRIC. This study applied an econometric model through multiple regression analysis based on Ordinary Least Square method (OLS). Simultaneously, to test a long-term relationship, we used the cointegration test. Conversely, the Augmented Dickey-Fuller (ADF) and Phillip-Perron (PP) tests used to check the stationarity of the data. The results show the significant and positive effect of foreign direct investment (FDI) on export performance; similarly official development assistance (ODA) and gross domestic product (GDP) have a positive impact on export performance. In contrast, the inflation rate and labor force variables have a negligible and negative impact on export performance in Somalia. Keywords: FDI, GDP, Export, Agriculture, Somalia