The Impact Of Remittances And Foreign Direct Investment On Export Performance In Zimbabwe Under The Multicurrency System.

Author: Chikwanda, Kevin

The study investigated the impact of remittances and foreign direct investment (FDI) on export performance in Zimbabwe under the multicurrency system. Gross domestic product (GDP), inflation, exchange rate and trade openness were used as control variables. The study was based on quarterly time series data for the period 2009 to 2016. The Autoregressive Distributed Lag (ARDL) model was used to analyze the data. Remittances were found to have a positive impact on exports both in the short run long run. FDI in the current period was found to be insignificant in the short run and Lagged FDI was found to be statistically significant and positively impact export performance. GDP, exchange rate and trade openness were found to have a positive impact on exports, while inflation had a negative impact. We recommend policy makers to craft laws that promote the channeling of remittances to export oriented firms or sector where the country has comparative advantage so as to increase exports.