Effects of trade liberalisation on technical efficiency in Zimbabwe’s cropping sector.

Abstract

The study was aimed at investigating the effects of trade liberalisation on technical efficiency taking Zimbabwe cropping sector as a case study. The study was a time series analysis with 30 observations being reviewed from 1985 to 2015. The motive of the study was basically to investigate whether an association exists between trade liberalisation and technical efficiency. The main objectives of the study were to estimate the level of technical efficiency and to evacuate is a positive/negative relationship exists between trade openness and technical efficiency. The study employed 8 variables including production variables and trade openness variables taking output as the dependant variable. A Stochastic frontier analysis model was adopted in the study using Stata. Stochastic frontier analysis was chosen against other models such as data envelopment analysis because of its capacity to estimate statistical hypothesis. The study produced a mixed bag of results initially illustrating that trade openness as a variable has no effects on technical efficiency. A further analysis of export intensity as a trade openness variable illustrated on a positive relationship with technical efficiency. The study discovered that an increase in import restrictions on the other hand will lead to improvements in technical efficiency. The study recommends further research on the relationship that exists on technical efficiency and trade liberalisation in order to yield conclusive relationships.