RESEARCH METHODOLOGY

2.0Introduction
In this chapter, the researcher presents the methodologies and procedures that are used in data
collection for the research. It comprised of research design, area of the study, research
approaches, source of data and data analysis.

2.1Research Design
Research design is a plan that specifies how data should be collected and analyzed. (Kothari,
2004: 31). A research design is the arrangement of conditions of collection and analysis of data
in a manner that aims to combine relevance to the research purpose with economy in procedure.

In this study, the researcher uses a descriptive study approach because the information will be
collected without altering the environment and there were no manipulation on the data collected.

2.2Area of the Study

A study is conducted in United Republic of Tanzania. Tanzania is used as a case study of the
research where export stand as the primary source of economic development.

2.3Research Approaches
A quantitative method is used to study the relationships between the independent variables
(Exchange rate fluctuation, Inflation rate and Gross Domestic Product) and dependent variable
(export growth).

2.4Source of Data Collection

In this study the researcher use the secondary data sources of information. Secondary data are
those data for which have already been collected by someone else, may be either published or
unpublished data. The study use a time series data and data used in this study will be gathered
from the IMF international statistics, Tanzania market report and the Bank of Tanzania (BOT)
annual reports, UNCTAD and World Bank data.

The export, exchange rate, inflation and GDP data are shown in appendix A, which include data
from the year 1987 to 2016. And these data are collected from UNCTAD and World Bank data.
2.5Data Analysis
Data analyzed and presented by employing the empirical model and data analysis tool which is
known as E-view8. Stability test, regression analysis, descriptive statistic, unit root test and
correlation analysis is employed to study the relationship between the variables over time.

2.5.1 Stability Test

In this study stability test is employed by using recursive estimate by CUSUM test so as to know
whether the dependent variable is stable or whether our regression model is stable or not.

2.5.2 Unit Root Test

The study is using a unit root test to check whether the data are stationary or not by using ADF
unit root testing with a modified Schwarz Info Criterion. Here if the absolute test statistic is more
than critical value (absolute) then we can reject null hypothesis and accept alternative hypothesis
and vice versa.

2.5.3 Descriptive Statistics

The descriptive analysis of all the variables in this study are sourced using E-View8 software for
the period of thirty years (1987 – 2016).The study statistics namely mean, standard deviation,
sleekness and kurtosis were investigated. Mean is used to locate the center of the relative
frequency distribution, kurtosis characterizes the relative placidness or flatness of a distribution
compared with the normal distribution, sleekness characterizes the degree of asymmetry of a
distribution around its mean while the standard deviation measures the spread of a set of
observations.

2.5.4 Pearson Correlation Model

A Pearson correlation is a figure between -1 and 1 that indicates the extent to which two
variables are linearly related, where 1 is total positive linear correlation, 0 is no linear
correlation, and -1 is a total negative linear correlation. This study uses the Pearson correlation
model in analyzing the data so as to achieve the first specific objective.

2.5.5 Regression Model

In this study, the researcher uses the regression analytical model in analyzing the data.
Regression is the determination of a statistical relationship between two or more variables. This
is shown below:
EXG = ∝ + β1EXRF +β2INFR + β3GDP + ε

Where:

EXG = export growth as exports of goods and services (Bop, current US$)

EXRF= exchange rate fluctuation as currency exchange rates, annual.

INFR= inflation rates Consumer price indices, annual.

GDP= GDP as total and per capita, at current prices, annual (US Dollars in million)

ε = Error term.

2.5.6 Data Analysis Tool

In this study, the researcher use E-View8 as a tool for analyzing the data. E- View is a statistical
package for Windows, used mainly for time-series oriented econometric analysis. E-View8 used
to describe the collected data, sort and sift through and analyze it.