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

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.