The Interplay of Industrialization, Urbanization and Economic growth


Authors : NDAGIJIMANA Jabo Felix

Volume/Issue : Volume 8 - 2023, Issue 10 - October

Google Scholar : https://tinyurl.com/yk89y8un

Scribd : https://tinyurl.com/t5fced4j

DOI : https://doi.org/10.5281/zenodo.10147611

Abstract : This study investigates the interplay of industrialization, urbanization, and economic growth in Rwanda. Using yearly data from 1973 to 2021, this study uses the Vector Error Correction Model technique to identify long-term and short-term relationships between industrialization, urbanization, and economic growth in Rwanda. The Granger Wald test is used to determine whether the variables are causally related. The study findings demonstrate the long-term and short-term reciprocal relationships between industrialization, urbanization, and economic growth.Moreover,a bidirectional causality from economic growth to industrialization in the long run and unidirectional causality from industrialization and economic growth to urbanization was found while only economic growth had a causal effect on urbanization in the short run. The study found that Decisions affecting one component can have far-reaching effects for others. It is critical to adequately manage this dynamic to maintain balanced and sustainable development.

Keywords : Industrialization, Urbanization, Economic growth, Rwanda.

This study investigates the interplay of industrialization, urbanization, and economic growth in Rwanda. Using yearly data from 1973 to 2021, this study uses the Vector Error Correction Model technique to identify long-term and short-term relationships between industrialization, urbanization, and economic growth in Rwanda. The Granger Wald test is used to determine whether the variables are causally related. The study findings demonstrate the long-term and short-term reciprocal relationships between industrialization, urbanization, and economic growth.Moreover,a bidirectional causality from economic growth to industrialization in the long run and unidirectional causality from industrialization and economic growth to urbanization was found while only economic growth had a causal effect on urbanization in the short run. The study found that Decisions affecting one component can have far-reaching effects for others. It is critical to adequately manage this dynamic to maintain balanced and sustainable development.

Keywords : Industrialization, Urbanization, Economic growth, Rwanda.

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