Industry development indicators refer to a set of measures used to assess the performance and growth of industries. The main aim of this study was to assess the relationship between industry development indicators in Ethiopia using a multivariate GARCH model based on World Bank data from 1982 to 2021. A time series technique using annual data for the period 1982-2021 is utilized, and multivariate generalized autoregressive conditional heteroscedasticity was performed for volatility modeling.
The results of the diagonal BEKK (1, 1)-GARCH model showed that volatility is explosive; it means that the volatility of the development indicators is growing at an accelerating rate over time and potentially more extreme.
The implication of the study is that both domestic policymakers and development partners should support and motivate the growth of manufacturing sectors and manufacturing exports, since this is a necessary condition for promoting industry growth.