THE ECONOMIC CONTRIBUTION OF INDUSTRIAL PARKS IN ETHIOPIA

Abstract

The Ethiopian government has been intensively engaged in the construction of industrial parks that are targeted to accelerate overall economic growth by providing productive employment opportunity for the population, technology, knowledge and skill transfer and export of manufactured goods which generate foreign currencies. Thus, the main objective of this study is to assess the economic contribution of industrial parks on Ethiopian economy in order to make a one-step contribution to the existing literature, especially in Ethiopia where there is no empirical study on the topic. The study used quantitative research approach. To this end, secondary data was collected from Ethiopian Investment Commission, Industrial Parks Development Corporation, World Bank, Ministry of Industry and National Bank of Ethiopia for the period 2015 to 2019.The researcher also used relevant websites and annual bulletins for the study. The trend analysis of employment opportunity and export revenue showed that, increasing every year. The main reason of this result is the addition of newly operated industrial parks every year. While FDI increased at increasing rate in first three years and the performance was decreased by year of 2018 and 2019. The empirical results showed that export revenue has a positive significant relationship with RGDP at 5% and FDI has a negative significant relationship with RGDP at 5% confidence interval while employment opportunity have no significant relationship with RGDP. From the findings the study recommended that more job should be done on increasing creation of employment opportunity and promoting export through product differentiation and improving quality of the product.