Abstract

This paper uses econometric analysis to explore the determinants of export growth rate in Madagascar over the period 1985-2013. Based on the model, variables of export price, Foreign Direct Investment (FDI), world Income, terms of trade, real exchange rate and farm gate price are employed. The results show that export growth rate, export price, FDI, world income, terms of trade, real exchange rate and farm gate price are co integrated. The estimated long run (short run) elasticity of export growth rate with terms of trade show significantly a positive impact on export growth rate whereas farm gate price negative effect. However, in term of the real exchange rate, in short run, it stimulates export growth as an incentive in form of depreciation of the currency but in long run the positive elasticity expressing an appreciation of the currency affect export growth rate negatively. The FDI and world income a weak positive influence on the export growth rate. The effect of export price level on export growth rate is not verified implying that the price does not explain export growth rate in Madagascar.

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