Page 80 - Azerbaijan State University of Economics

THE JOURNAL OF ECONOMIC SCIENCES: THEORY AND PRACTICE, V.78, # 2, 2021, pp. 74-88

Difference Generalized Method of Moment and system Generalized Method of Moment
are the two recent common variants of Generalized Method of Moment. But, given the
poor performance of the difference Generalized Method of Moment models, particularly
in the presence of high serial correlation, Blundell and Bond (1998) designed a system
Generalized Method of Moment that uses lagged first differences of the explanatory
variables and the dependent variable as instruments in addition to the lagged level
instruments.
Therefore, the system GMM was used to identify the factors which affect the factor of
productivity in the manufacturing sector in Ethiopia over the period 2001-2017. Before
estimating the Generalized Method of Moment model, the stationarity of the series over
time was checked. To do this, the standard Augmented Dickey-Fuller (ADF) and
Phillips–Perron (PP) unit root tests were applied. In addition, to test the adequacy of the
GMM model, Sargan’s J-test of over-identifying restrictions was used.

II. RESULTS AND DISCUSSION
Descriptive Analysis
Trend and Structure of Large and Medium-scale Manufacturing Industries

Under this section, therefore, the trend and structure of large and medium scale
manufacturing industries are assessed in terms of the total number of firms, size of
employment created, value-added, value-added per labor, and export intensity
(export per value of production).

Figure 1: Share Of Large And Medium-Scale Manufacturing Industries By
Sector (2001-2017)

Source: Own computation based on CSA data

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