Abstract:
This research is focusing on economic modelling of capital markets and investment sustainability
in Rwanda.
In Rwanda the investment is very highly needed in order to uplift the level of the economy of the
country. There are different reasons for instance the costs of transport due to the geographical
situation. In this research, the focus is to test the significance of the capital markets on investment
at market of Rwanda. The regression model will apply, but, first of all, the graphical presentation
will be done all variables of the model; investment, turnover and market capitalization have the
trend and intercept while number of shares has the intercept only. In addition, the test of
stationarity will follow; whereby, investment and market capitalization are stable on the first
difference while turnover and number of shares are stationary at level. These variables are
cointegrated. In Error Correction Model there will take 33 months to recover in short. The long
run relationship shows that, the model fits at 88%. The Impulse-Responses also determines how
the shocks will affect one another.
The capital market needs an important support to raise the investment in Rwanda. Because the
findings illustrates its impact positively.
