Globalization and Export of Primary Products:
The Case of Ethiopian Coffee Export

This paper discusses the effects of globalization in developing countries which are mostly dependent on export of primary products. It tries to closely investigate these effects by using co-integration and error correction models to analyze the causal relationship between
coffee export and globalization in Ethiopia using time series data for the period covering 1984-2003. The empirical results show that bidirectional causality exists running from real trade to real coffee export as well as from real coffee export to real trade. However, longrun
causality is unidirectional running from real trade to real coffee export only. These results thus envisage that globalization is one reason for the coffee crisis seen in Ethiopia.