TITLE:
Trade Liberalization and Disaggregated Import Demand in Uganda
AUTHORS:
Gaalya Micah Samuel
KEYWORDS:
Trade Liberalization, Import Demand, Consumer Goods, Intermediate Goods, Capital Goods, Uganda
JOURNAL NAME:
Modern Economy,
Vol.6 No.3,
March
10,
2015
ABSTRACT: Studies investigating
determinants of import demand for Uganda present aggregate findings yet there
is a need to disaggregate the findings for specific sectors. This creates a
research gap on disaggregated findings of import demand. This research attempts
to fill this research gap by establishing determinants of import demand using
disaggregated sector level data for consumer, intermediate and capital goods.
The study estimates the long-run and short-run import demand elasticities for
consumer, intermediate and capital goods over the period (1994 to 2012). The results
show that there exists a cointegrating relationship between the disaggregated
import demand and the following set of variables; relative import price, GDP
per capita, real effective exchange rate, foreign exchange rate reserves and
trade openness. The long run elasticity appears more responsive to import
demand compared to the short-run elasticity. Importantly the effect of a change
in trade openness on the volume of imports is positive, suggesting trade
liberalization increases import demand.