Economic Analysis of the Impact of Globalization on Ethiopian Economy

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An Error Correction Method

Nowadays the issue of globalization has received huge attention from researchers in different areas for the fact that we always hear about it but there exists little evidences of convergences.

While some researchers argue pro globalization others pointed out the costs of globalization being outweighs its benefits and it fails to meet its potentials of benefiting both developing and developed world.

This study has attempted to investigate the economic impact of globalization on Ethiopia using the annual data covering from 1980 to 2015 and by employing a cointegration analysis.

The empirical result revealed that economic growth of Ethiopia is being affected by globalization both in the short-run and long-run.

Thus economic growth and globalization have a long-run relationship which is found to be both positive and significant.

Therefore, Ethiopia can be benefited more provided that if the economy of country is being integrated and opened to the competition from the rest of the world.

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