Can Proximity with Resource-Endowed Economies Influence FDI Inflow? the Case of Rwanda
Antoine Matemane Mahirwe1, Wei Long2
1Antoine Matemane Mahirwe, Wuhan University of Technology, China.
2Wei Long, Wuhan University of Technology, China.
Manuscript received on 26 November 2019 | Revised Manuscript received on 14 December 2019 | Manuscript Published on 30 December 2019 | PP: 485-489 | Volume-9 Issue-2S3 December 2019 | Retrieval Number: B11171292S319/2019©BEIESP | DOI: 10.35940/ijitee.B1117.1292S319
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© The Authors. Blue Eyes Intelligence Engineering and Sciences Publication (BEIESP). This is an open-access article under the CC-BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/)
Abstract: The purpose of this study was to investigate if a country with limited natural resources can benefit from its geographic location due to the presence of countries in its neighborhood which are rich in natural resources. This study asserted that to benefit from other countries factors endowments, a country has to focus on enhancing other factors which are poorly achieved in neighboring countries. This study found that by focusing on improving investment and regulatory environment, Rwanda has tremendously benefited from its proximity with countries rich in natural resources but with low performance in terms of regulations and investment climate. The Johansen test reveals that in the long run, proximity exerts a positive influence on FDI inflow. However, as revealed by VECM test, in the short run the country may not benefit as it requires time to develop its investment and regulatory institutions.
Keywords: Natural Resources, FDI, Proximity.
Scope of the Article: QOS And Resource Management