Improving Exports: Quasi‐Experimental Evidence From the Ethiopia Commodity Exchange

ABSTRACT In recent times, discussions have arisen about the potential trade benefits that agricultural commodity exchanges can bring to economies reliant on agriculture. This study employs a quasi‐natural experimental approach to investigate the tangible advantages brought about by the Ethiopia Commodity Exchange (ECX) in enhancing Ethiopia's coffee trade. Utilising a triple‐differences empirical design to mitigate potential confounding factors, our research reveals a substantial increase in coffee exports resulting from the establishment of the ECX, both in terms of export volume and destinations. Importantly, our findings are not driven by placebo effects, which underscores the genuine positive impact of the ECX on Ethiopian coffee trade. From a policy perspective, our study indicates that the advantages of establishing a commodity exchange, particularly akin to the ECX, can benefit low‐income agriculturally dependent countries seeking to promote exports.