Structural Transformation to Take Off Economy in Developing Nations: Research on Theory and Practice in Vietnam
Issue:
Volume 4, Issue 1, February 2015
Pages:
1-14
Received:
19 January 2015
Accepted:
26 January 2015
Published:
10 February 2015
Abstract: Structural transformation aims at shifting from undeveloped economy into developed one, yet maintains an increase in income and social welfare. A theoretical and empirical research in developed nations unveils that economic structure and its transformation play a decisive role for economic take-off. Economic structure is, however, an enormous issue; thus finding out the core or its starting point is regarded as the key deciding the impetus for economic take-off. On the basis of Rostow’s theory, an empirical research from Hollis B. Chenery and successful industrialization in different nations, the author realizes that economic transformation generally derives from industrial production. On this foundation, the author initially discovers and suggests hypothesis of industrial-product structure as an efficient ruler of economic structure. It is used to verify Vietnam’s growth in the period from 1986 to 2012 - a typical developing nation with growth through years but failure to take off. The research reveals that Vietnam’s economic structure depends on a weak and less competitive industry, primarily on industries of food, beverage, resources exploitation and intensive laborers; hence take-off hand in hand with modification of economic structure, the core of which is industrial-product structure. Policy and measures on the scientific grounds coming from this theory suggest that a focus must be on heavy industry, consuming industry, supporting industry and processing industry, from which Vietnam compatibly benefits. Furthermore, effective role of every single economic sector must be determined to boost development of all industries. That is the best action for present and long term to take off economy.
Abstract: Structural transformation aims at shifting from undeveloped economy into developed one, yet maintains an increase in income and social welfare. A theoretical and empirical research in developed nations unveils that economic structure and its transformation play a decisive role for economic take-off. Economic structure is, however, an enormous issue...
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Determinants of Earnings from Tea Export in Kenya: 1980-2011
Agnes Kinya Muthamia,
Willy Muturi
Issue:
Volume 4, Issue 1, February 2015
Pages:
15-22
Received:
27 January 2015
Accepted:
10 February 2015
Published:
28 February 2015
Abstract: Fluctuation of tea export earnings affects the profitability of firms in the sector and therefore farmers’ earnings (bonus). To this end, there is dire need for stabilizing the earnings to farmers hence need to know the key factors which could be targets for policy and hence the need for this study. The dependent variable was tea export earning while the independent variables were real exchange rate, foreign income and inflation. To enhance accuracy and credibility of this study, control variables used include unit prices of tea, agriculture value added as well as export of goods and services. The specific objectives included exploring the effect of real exchange rate on tea export earnings; the effect of inflation rate, and establishing the effect of foreign income of major trading partners on tea export earnings. Various regression methods are used to test the research hypothesis, including unit root tests, co integration, and error correction model. The long run and short run analysis of these variables is taken to account. Findings ascertain that indeed the model gives a good description of the variables. Foreign income has an indirect relationship with tea export earnings. On the other hand, they are all significant except inflation. There is a direct relationship between tea export earnings and real exchange rate, tea price, export of goods and services, and agriculture value addition. The study recommends tea exporters to hedge against foreign exchange risk through derivative markets. It encourages stakeholders to engage in marketing and value addition. Value addition is a sustainable solution to ensure stability of earnings from tea exports in the country. Finally, strong monetary policies are recommended to enhance price stability and tea export earnings. This is because such policies should curb the problem of extensive volatility of inflation and exchange rates.
Abstract: Fluctuation of tea export earnings affects the profitability of firms in the sector and therefore farmers’ earnings (bonus). To this end, there is dire need for stabilizing the earnings to farmers hence need to know the key factors which could be targets for policy and hence the need for this study. The dependent variable was tea export earning whi...
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