Determinants of export diversification in Rwanda
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Date
2023
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Publisher
University of the Western Cape
Abstract
Since Rwanda gained independence in 1962, the country’s export diversification has become a crucial tool for enhancing economic development, economic growth, and Balance of payment. This is why Rwanda expanded the list of not only export products but also the economic integration blocks. However, the country’s export still needs to be of a better standard. The export diversification factors still need to be investigated for more efficient export policies. The purpose of this research is to determine the factors that contributed to Rwanda’s export diversification using time series data from 1980 to 2014. In this study, the ADF and PP tests were utilized to assess the stationarity properties of the unit root test, the ARDL model was conducted to test the co-integrating amongst the variables, while the estimated short-run ECM was also derived. The empirical results demonstrated that trade openness, terms of trade, and GDP per capita, have insignificant negative impacts on export diversification both in the short and long term, while infrastructure has a significant positive impact on export diversification. However, FDI had an insignificant positive influence on the country’s export diversification.
Description
Magister Economicae - MEcon
Keywords
Diversification, Rwanda, ARDL model, Theil index, Augmented-Dickey Fuller