EFFECT OF SELECTED MACRO
ECONOMIC VARIABLES ON FOREIGN DIRECT INVESTMENT IN KENYA
CHAPTER ONE: INTRODUCTION
1.1 Background of the study 2
1.2 Statement of the Problem 3
1.3 General Objective of the Study 5
1.3.1 Specific Objectives of the Study 5
1.4 Research Hypotheses 5
1.5 Significance of the Study 6
1.6 Scope of the study 6
1.7 Limitation of the study 7
1.8 Assumption of the Study 7
1|Page
, EFFECT OF SELECTED MACRO
ECONOMIC VARIABLES ON FOREIGN DIRECT INVESTMENT IN KENYA
CHAPTER ONE
INTRODUCTION
1.1 Background of the study
Foreign direct investment (FDI) is the disposable influx of investment to gain controlling
benefits in a business that is based in an economy that is different from that of the investor
(World Bank, 2017). Most government policy makers have recognized the vital role played by
FDI and have enhanced avenues attracting it. FDI not only offers developing economies with
financial resources required for economic growth but also creates employment and help transfer
technological innovations and managerial expertise all leading to the progress of the economy.
Studies (Leitao, 2012; Mallampally & Sauvant, 1999; OECD, 2002) have shown that over the
years, FDI has become a major sources of investment flow between numerous markets hence
becoming an important promoter of growth of emerging nations economies such as Kenya. The
desire for improved economies, technological growth, poverty alleviation and higher living
standards has seen developing nations endeavor to get consistent FDI inflow (Mishkin & Eakins,
2009).
According to the International Monetary Fund (IMF), Foreign Direct Investment (FDI) is
an investment made to acquire lasting or long-term interest in enterprises operating outside the
economy of the investor (Feng, 2017). The Organization for Economic Co-operation and
Development (OECD) further defines it as a cross-border investment by a resident entity in one
economy with the objective of obtaining a lasting interest in an enterprise resident in another
economy (Feng, 2017). From a macroeconomic view, FDI is a specific form of capital flows
2|Page
ECONOMIC VARIABLES ON FOREIGN DIRECT INVESTMENT IN KENYA
CHAPTER ONE: INTRODUCTION
1.1 Background of the study 2
1.2 Statement of the Problem 3
1.3 General Objective of the Study 5
1.3.1 Specific Objectives of the Study 5
1.4 Research Hypotheses 5
1.5 Significance of the Study 6
1.6 Scope of the study 6
1.7 Limitation of the study 7
1.8 Assumption of the Study 7
1|Page
, EFFECT OF SELECTED MACRO
ECONOMIC VARIABLES ON FOREIGN DIRECT INVESTMENT IN KENYA
CHAPTER ONE
INTRODUCTION
1.1 Background of the study
Foreign direct investment (FDI) is the disposable influx of investment to gain controlling
benefits in a business that is based in an economy that is different from that of the investor
(World Bank, 2017). Most government policy makers have recognized the vital role played by
FDI and have enhanced avenues attracting it. FDI not only offers developing economies with
financial resources required for economic growth but also creates employment and help transfer
technological innovations and managerial expertise all leading to the progress of the economy.
Studies (Leitao, 2012; Mallampally & Sauvant, 1999; OECD, 2002) have shown that over the
years, FDI has become a major sources of investment flow between numerous markets hence
becoming an important promoter of growth of emerging nations economies such as Kenya. The
desire for improved economies, technological growth, poverty alleviation and higher living
standards has seen developing nations endeavor to get consistent FDI inflow (Mishkin & Eakins,
2009).
According to the International Monetary Fund (IMF), Foreign Direct Investment (FDI) is
an investment made to acquire lasting or long-term interest in enterprises operating outside the
economy of the investor (Feng, 2017). The Organization for Economic Co-operation and
Development (OECD) further defines it as a cross-border investment by a resident entity in one
economy with the objective of obtaining a lasting interest in an enterprise resident in another
economy (Feng, 2017). From a macroeconomic view, FDI is a specific form of capital flows
2|Page
