Öz
Purpose – This study investigates the effect of exchange rates and tariffs on Kenya’s terms of trade (ToT) between 2001 and 2021. It addresses a gap in empirical literature concerning the interaction between these trade variables and ToT, particularly in the context of Kenya’s structural economic transitions and exposure to external shocks.
Methodology – An explanatory research design was adopted using annual time series data. The study applied the Autoregressive Distributed Lag (ARDL) model and Toda-Yamamoto Granger causality testing to evaluate both the short-run and long-run impacts of exchange rates, tariffs, exports, and imports on ToT. Diagnostic tests for multicollinearity, normality, and autocorrelation were conducted to validate model robustness.
Findings – Granger causality results indicated that exchange rates, tariffs, exports, and imports significantly influence ToT, with bi-directional causality observed for all except exports. The ARDL model showed strong overall fit (R² = 82%) but failed to find statistically significant long-run effects from any single trade variable. In the short run, exchange rate depreciation significantly improved ToT, while import growth had a marginally negative effect. Exports and tariffs demonstrated limited immediate influence despite their predictive relevance.
Conclusion – Kenya’s ToT dynamics are most responsive to short-term exchange rate adjustments and import levels, with limited long-run determinacy from individual trade variables. The findings underscore the need for a flexible exchange rate regime, smarter tariff policy aligned with industrial goals, and export diversification. Coordinated macroeconomic and trade strategies are vital for insulating Kenya’s trade performance from external volatility and enhancing its global competitiveness.
Anahtar Kelimeler
Terms of trade exchange rates tariffs ARDL Granger Causality
Kaynakça
- Bevan, D., Collier, P., & Gunning, J. W. (1999). Anatomy of a temporary trade shock: The Kenyan coffee boom of 1976–79. In Trade Shocks in Developing Countries (Vol. 1). Oxford University Press.
- Bigsten, A. (2002). History and policy of manufacturing in Kenya. In Structure and Performance of Manufacturing in Kenya. University of Nairobi.
- Chepng’eno, W. (2018). Effect of price and exchange rate volatility on Kenya’s black tea export demand: A pooled mean group estimation. Journal of Development and Agricultural Economics, 10(3), 71–78. https://doi.org/10.5897/JDAE2017.0815
- d’Hôtel, E. M., Cotty, T. L., & Jayne, T. (2013). Trade policy inconsistency and maize price volatility: An ARCH approach in Kenya. Research Papers in Economics. https://ideas.repec.org/p/hal/journl/hal-00946226.html
- Gachunga, J. (2018). Effect of exchange rate volatility on imports and exports. Social Science Research Network. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3399483
- Gertz, G. (2008). Kenya’s trade liberalization of the 1980s and 1990s: Policies, impacts, and implications. Carnegie Endowment for International Peace.
- Githanga, B. (2015). Trade liberalization and economic growth in Kenya: An empirical investigation (1975–2013). [Master’s thesis, Lund University]. http://www.diva-portal.org/smash/record.jsf?pid=diva2:826512
- Glenday, G., & Ndii, D. (2000). Export platforms in Kenya. African Economic Policy Discussion Paper, No. 43.
- Igesa, B. S., Okiyama, M., & Tokunaga, S. (2018). Impacts of tariff reduction and mixed fiscal policy on the Kenyan agricultural and food industry: Using the macro CGE model. Japanese Journal of Agricultural Economics, 20, 51–56. https://doi.org/10.18480/JJAE.20.0_51
- Ikiara, G. K., Nyunya, J. O., & Odhiambo, W. (2004). Kenya: Formulation and implementation of strategic trade and industrial policies. In C. Soludo, O. Ogbu, & H.-J. Chang (Eds.), The Politics of Trade and Industrial Policy in Africa (pp. 211–234). Africa World Press Inc.
- Manyinsa, G. G., Omwenga, J., & Ndungu, M. (2015). Relationship between international trade and economic growth in Kenya. Prime Journal of Social Science, 4(11), 992–1002. http://primejournal.org/PJSS/pdf/2015/nov/Manyinsa%20et%20al.pdf
- Matiy, A. K., & Matundura, E. (2019). Analysis of macroeconomic factors affecting the performance of manufactured exports in Kenya. The International Journal of Business and Management, 7(9). https://doi.org/10.24940/theijbm/2019/v7/i9/BM1909-023
- Musyoki, D., Pokhariyal, G. P., & Pundo, M. (2014). The impact of real exchange rate misalignment on economic growth: Kenyan evidence. Research Journal of Finance and Accounting, 5(8), 110–120. https://iiste.org/Journals/index.php/RJFA/article/view/12
- Mwega, F. (2002). Promotion of non-traditional exports in Kenya: 1980–1996. In G. Helleiner (Ed.), Non-Traditional Export Promotion in Africa: Experience and Issues (pp. 145–180). Palgrave Macmillan.
- Nyambariga, D. M. (2017). Effects of exchange rate volatility on imports and exports in Kenya. University of Nairobi Journal of Economics, 2(3), 71–84.
- Nzuma, J. (2007). An economic analysis of the impacts of trade liberalization on Kenya’s maize sector. [Doctoral dissertation, University of Nairobi]. http://erepository.uonbi.ac.ke/handle/11295/13857
- Nzuma, J., & Sarker, R. (2010). Who are the real gainers of trade liberalization ın Kenya’s Maize Sector? Agricultural Economics, 41(1), 43–59. https://doi.org/10.22004/AG.ECON.95972
- Swamy, G. (1994). Kenya: Patchy, intermittent commitment. In I. Husain & R. Faruqee (Eds.), Adjustment in Africa: Lessons from Country Case Studies (pp. 235–276). World Bank.
- Swamy, G. (1994). Kenya: Structural adjustment in the 1980s. World Bank Policy Research Working Paper, No. 1238. https://documents.worldbank.org/en/publication/documents-reports/documentdetail/183431468753248582/kenya-structural-adjustment-in-the-1980s
- Umutesi, A., & Gor, S. O. (2014). Price elasticities of Kenya’s exports. Social Science Research Network. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2392804
- Wagacha, M. (2000). Analysis of liberalization of the trade and exchange regime in Kenya since 1980. IPAR Discussion Paper Series, No. 023/2000.
- Were, M., Ngugi, R., Makau, P., Wambua, J., & Oyugi, L. (2002). Analysis of Kenya’s export performance: An empirical evaluation. KIPPRA Discussion Paper, No. 22.
- World Bank. (2007). World Development Indicators 2007. World Bank. https://databank.worldbank.org/source/world-development-indicators
Öz
Kaynakça
- Bevan, D., Collier, P., & Gunning, J. W. (1999). Anatomy of a temporary trade shock: The Kenyan coffee boom of 1976–79. In Trade Shocks in Developing Countries (Vol. 1). Oxford University Press.
- Bigsten, A. (2002). History and policy of manufacturing in Kenya. In Structure and Performance of Manufacturing in Kenya. University of Nairobi.
- Chepng’eno, W. (2018). Effect of price and exchange rate volatility on Kenya’s black tea export demand: A pooled mean group estimation. Journal of Development and Agricultural Economics, 10(3), 71–78. https://doi.org/10.5897/JDAE2017.0815
- d’Hôtel, E. M., Cotty, T. L., & Jayne, T. (2013). Trade policy inconsistency and maize price volatility: An ARCH approach in Kenya. Research Papers in Economics. https://ideas.repec.org/p/hal/journl/hal-00946226.html
- Gachunga, J. (2018). Effect of exchange rate volatility on imports and exports. Social Science Research Network. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3399483
- Gertz, G. (2008). Kenya’s trade liberalization of the 1980s and 1990s: Policies, impacts, and implications. Carnegie Endowment for International Peace.
- Githanga, B. (2015). Trade liberalization and economic growth in Kenya: An empirical investigation (1975–2013). [Master’s thesis, Lund University]. http://www.diva-portal.org/smash/record.jsf?pid=diva2:826512
- Glenday, G., & Ndii, D. (2000). Export platforms in Kenya. African Economic Policy Discussion Paper, No. 43.
- Igesa, B. S., Okiyama, M., & Tokunaga, S. (2018). Impacts of tariff reduction and mixed fiscal policy on the Kenyan agricultural and food industry: Using the macro CGE model. Japanese Journal of Agricultural Economics, 20, 51–56. https://doi.org/10.18480/JJAE.20.0_51
- Ikiara, G. K., Nyunya, J. O., & Odhiambo, W. (2004). Kenya: Formulation and implementation of strategic trade and industrial policies. In C. Soludo, O. Ogbu, & H.-J. Chang (Eds.), The Politics of Trade and Industrial Policy in Africa (pp. 211–234). Africa World Press Inc.
- Manyinsa, G. G., Omwenga, J., & Ndungu, M. (2015). Relationship between international trade and economic growth in Kenya. Prime Journal of Social Science, 4(11), 992–1002. http://primejournal.org/PJSS/pdf/2015/nov/Manyinsa%20et%20al.pdf
- Matiy, A. K., & Matundura, E. (2019). Analysis of macroeconomic factors affecting the performance of manufactured exports in Kenya. The International Journal of Business and Management, 7(9). https://doi.org/10.24940/theijbm/2019/v7/i9/BM1909-023
- Musyoki, D., Pokhariyal, G. P., & Pundo, M. (2014). The impact of real exchange rate misalignment on economic growth: Kenyan evidence. Research Journal of Finance and Accounting, 5(8), 110–120. https://iiste.org/Journals/index.php/RJFA/article/view/12
- Mwega, F. (2002). Promotion of non-traditional exports in Kenya: 1980–1996. In G. Helleiner (Ed.), Non-Traditional Export Promotion in Africa: Experience and Issues (pp. 145–180). Palgrave Macmillan.
- Nyambariga, D. M. (2017). Effects of exchange rate volatility on imports and exports in Kenya. University of Nairobi Journal of Economics, 2(3), 71–84.
- Nzuma, J. (2007). An economic analysis of the impacts of trade liberalization on Kenya’s maize sector. [Doctoral dissertation, University of Nairobi]. http://erepository.uonbi.ac.ke/handle/11295/13857
- Nzuma, J., & Sarker, R. (2010). Who are the real gainers of trade liberalization ın Kenya’s Maize Sector? Agricultural Economics, 41(1), 43–59. https://doi.org/10.22004/AG.ECON.95972
- Swamy, G. (1994). Kenya: Patchy, intermittent commitment. In I. Husain & R. Faruqee (Eds.), Adjustment in Africa: Lessons from Country Case Studies (pp. 235–276). World Bank.
- Swamy, G. (1994). Kenya: Structural adjustment in the 1980s. World Bank Policy Research Working Paper, No. 1238. https://documents.worldbank.org/en/publication/documents-reports/documentdetail/183431468753248582/kenya-structural-adjustment-in-the-1980s
- Umutesi, A., & Gor, S. O. (2014). Price elasticities of Kenya’s exports. Social Science Research Network. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2392804
- Wagacha, M. (2000). Analysis of liberalization of the trade and exchange regime in Kenya since 1980. IPAR Discussion Paper Series, No. 023/2000.
- Were, M., Ngugi, R., Makau, P., Wambua, J., & Oyugi, L. (2002). Analysis of Kenya’s export performance: An empirical evaluation. KIPPRA Discussion Paper, No. 22.
- World Bank. (2007). World Development Indicators 2007. World Bank. https://databank.worldbank.org/source/world-development-indicators
Ayrıntılar
| Birincil Dil | İngilizce |
|---|---|
| Konular | Finans, Finans ve Yatırım (Diğer), İşletme |
| Bölüm | Articles |
| Yazarlar | |
| Yayımlanma Tarihi | 30 Temmuz 2025 |
| Gönderilme Tarihi | 22 Nisan 2025 |
| Kabul Tarihi | 27 Haziran 2025 |
| Yayımlandığı Sayı | Yıl 2025 Cilt: 14 Sayı: 1 |
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