The Contribution of FDI Inflows on High Technological Structure of Rwanda Manufactured Exports

Jean Claude Umuhire • Benitha Muteteri
Journal article World Journal of Innovative Research • August 2018 Rwanda

Abstract

The contribution of Foreign Direct Investment inflows on High Technological Structure of Rwanda Manufactured Exports for the period 1987-2017. We used a Vector Autoregressive model, to analyze this relationship: determined the lag structure verified the stationarity of both series and explored co-integration and causality between High-technology manufactured exports, total exports value and Foreign Direct Investment inflows. Our findings established that a VAR (1) was the appropriate model and found that all variables have long-term or long-run equilibrium in Rwanda as confirmed by Tests of co-integration. Granger tests have suggested that technological structure of manufacturing and Foreign Direct Investment inflows are independent (no causality between them) for the Rwandan economy while Foreign Direct Investment inflows have a great contribution on Rwanda manufactured exports. The study also suggests that the policy regarding domestic efforts to enhance manufacturing exports needs reassessment in line with the FDI policy framework in order to reap maximum and long-term equilibrium.

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World Journal of Innovative Research

World Journal of Innovative Research (WJIR) is an international, monthly, peer reviewed multidis... see more