%0 Journal Article
%T Impact of Gross Capital Formation and Foreign Direct Investment on Economic Growth in Rwanda (1990-2017)
%A Jean Marie Vianney Ntamwiza
%A Fabien Masengesho
%J Current Urban Studies
%P 1-13
%@ 2328-4919
%D 2022
%I Scientific Research Publishing
%R 10.4236/cus.2022.101001
%X This study investigates the determinant of economic
growth in Rwanda, using time series data for the period 1990-2017. These data
have been analy<span style=\"font-family:Verdana;\">z</span><span style=\"font-family:;\" \"=\"\"><span style=\"font-family:Verdana;\">ed and interpreted using statistical, analytical,
synthetic methods as well as an </span><span style=\"font-family:Verdana;\">econometrical
approach. The economy of Rwanda represents </span></span><span style=\"font-family:Verdana;\">the </span><span style=\"font-family:Verdana;\">research </span><span style=\"font-family:Verdana;\">gap about the components and determinants of
economic growth as instrument policies to alleviate poverty and rise out
production. The objective was to test the trends and relationship between
capital formation, foreign direct investment and economic growth in Rwanda.
This research tested and confirmed the following: gross capital formation and
foreign direct investment are </span><span style=\"font-family:Verdana;\">the </span><span style=\"font-family:Verdana;\">main
determinants of economic growth in Rwanda for the period under</span><span style=\"font-family:Verdana;\"> study. </span><span style=\"font-family:;\" \"=\"\"><span style=\"font-family:Verdana;\">R-square, the overall
measure of goodness of fit indicates that the explanatory variables included in
the above model explain 89.3% of the variation of the dependent variable (GDP
growth) for the long run regression model and 97% </span><span style=\"font-family:Verdana;\">for the error correction model. The error correction model shows that
the</span><span style=\"font-family:Verdana;\"> speed back to equilibrium is 86.4% that is when a shock happens in
the previous period it decreases by 86% in the current period. This indicates
that there is a significant short</span></span><span style=\"font-family:Verdana;\">-</span><span style=\"font-family:;\" \"=\"\"><span style=\"font-family:Verdana;\">run relationship as it was shown by the coefficients of the </span><span style=\"font-family:Verdana;\">error correction model which are significant.</span></span><span style=\"font-family:Verdana;\"> Based on the existence of a</span><span style=\"font-family:Verdana;\"> long</span><span style=\"font-family:Verdana;\">-</span><span style=\"font-family:Verdana;\">run co-integrating
relationship and the short</span><span style=\"font-family:Verdana;\">-</span><span style=\"font-family:Verdana;\">run interactions, the researcher tested and
confirmed that there was </span><span style=\"font-family:Verdana;\">a
%K Economic Growth
%K Gross Capital Formation
%K Foreign Direct Investment
%K Inflation and Exchange Rate
%U http://www.scirp.org/journal/PaperInformation.aspx?PaperID=114491