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Research Article Open access CC BY 3.0

Bootstrap Causality among Foreign Direct Investment, Exports and Economic Growth in Burundi

Arcade Ndoricimpa

Journal of Economics, Management and Trade · pp. 2022–2033 · Published 21 Aug 2014

10.9734/BJEMT/2014/12454

Abstract

Aims: This paper examines the causal links among Foreign Direct Investment (FDI), exports and economic growth in Burundi. Methodology: The paper applies bootstrap causality tests to account for non-normality in error terms and the presence of ARCH effects in which case the Wald statistic does not follow the usual distribution thus biasing causality tests. Results: The findings reveal that there is no causality whatsoever among FDI, exports and economic growth in Burundi, rejecting FDI-led export, export-led growth and FDI-led growth hypotheses. Conclusion: The results imply that FDI and exports are not engines of growth for Burundi. Sources of growth which are desperately needed should be sought for elsewhere.  

Exports FDI economic growth Burundi bootstrap causality test

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