High Technology Exports, Gross Capital Formation and Economic Growth in Uganda: A Vector Auto Regressive Approach
International Journal of Business and Economics Research
Volume 7, Issue 6, December 2018, Pages: 191-202
Received: Sep. 5, 2018; Accepted: Sep. 26, 2018; Published: Nov. 1, 2018
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Paul Wabiga, Graduate School of Economic and Management Sciences (GEM), Stellenbosch University, Stellenbosch, South Africa
Sawuya Nakijoba, Capacity Development Division, United Nations Economic Commission for Africa (UNECA), Addis Ababa, Ethiopia
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This study examines the relationship between high technology exports, gross capital formation and economic growth in Uganda with the ultimate aim of establishing whether exportation of high-tech goods and gross capital formation have a significant effect on economic growth. Motivated by the continued policy shift in Sub-Saharan Africa and generally in the developing world, towards outward looking strategies, this study seeks to provide a validation test to this trend from a small open developing country perspective. The study utilizes data from the World Bank Development Indicators. This study estimates a basic Vector Autoregressive model to establish the likely effects of high-tech exports and gross capital formation on growth. The authors later provide in-depth analysis of our results using impulse response functions (IRF). Our Vector Auto Regression (VAR) results indicate that in the short run, high-tech exports do not have a significant effect on economic growth in Uganda and gross capital formation has a negative and significant effect. However, IRF reveals gross capital formation having a positive and significant effect on growth and the effect of high-tech exports improving significantly over a long horizon. Our findings do not contradict previous studies but support the belief that once economic fundamentals are put in place, high-tech exportation can spur growth more than mere export volumes.
High Technology Exports, Gross Capital Formation, Economic Growth, VAR, IRFs, Uganda
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Paul Wabiga, Sawuya Nakijoba, High Technology Exports, Gross Capital Formation and Economic Growth in Uganda: A Vector Auto Regressive Approach, International Journal of Business and Economics Research. Vol. 7, No. 6, 2018, pp. 191-202. doi: 10.11648/j.ijber.20180706.13
Copyright © 2018 Authors retain the copyright of this article.
This article is an open access article distributed under the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0/) which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
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