Do Investment and export affect Economic Growth? A case of Zanzibar

Abstract

This paper investigated the effect of investment and exports on economic growth in Zanzibar. The study used secondary data obtained Zanzibar statistical abstracts downloaded from website of the Office of Chief Government Statistician and other resources from different websites, the data covered the period from 2006 to 2020.The data was tested for unit root, cointegration and causality and was found to stationary at the first deference, variables have long run relationship and no bidirectional granger causality running from investment and export to economic. The regression revealed that investment and export have positive and significant effect on economic growth, hence investments and exports have a strong positive relationship with economic growth, the study suggested that the increase in both investments and exports would lead to an increase in economic growth, the regression was also tested for diagnostic and stability tests the results revealed that the there is no serial correlation and the data was normally distributed.

Keywords: investment, exports, economic growth, regression, Zanzibar

DOI: 10.7176/JESD/15-3-01

Publication date: February 28^th 2024