2.5 theoretical literature
The theories discussed here include internalization theory, product life cycle theory, the
eclectic hypothesis theory and selected theories on economic growth. Many scholars have strived
to investigate the factors affecting FDI inflows in the Kenyan context, but these studies
concentrated on other impacting factors of FDI other than selected Macroeconomic variables.
This research leveraged on this gap by studying the effect of macro-economic variables on
Kenya’s FDI growth rate.
Table 2. 1 Summary of Literature Review and Research Gaps in the Table 2.1,
summarizes of the literature as reviewed in this study. The gaps as well as the focus of the
current study as highlighted from previous studies and how the shortcomings or points raised
were tackled in the current study, which is the focus of this study.
Author (Year) Area of study focus Findings Research Gaps Focus of
current study
Bichanga, 2016
Njuguna, 2016
Ahmed &
Mayowa 2010
Chingaran de et
al., 2012
Bilawal, 2014
Wanjiru, 2013
2.6 conceptual framework
The model below indicates the potential connection amid the study variables. The
elements under scope are inflation rates, interest rates, foreign exchange rates, and FDI. The
independent variables are inflation rate as measured by quarterly CPI, exchange rates as
measured by annual average exchange rate between KSH and USD, and interest rates as
The theories discussed here include internalization theory, product life cycle theory, the
eclectic hypothesis theory and selected theories on economic growth. Many scholars have strived
to investigate the factors affecting FDI inflows in the Kenyan context, but these studies
concentrated on other impacting factors of FDI other than selected Macroeconomic variables.
This research leveraged on this gap by studying the effect of macro-economic variables on
Kenya’s FDI growth rate.
Table 2. 1 Summary of Literature Review and Research Gaps in the Table 2.1,
summarizes of the literature as reviewed in this study. The gaps as well as the focus of the
current study as highlighted from previous studies and how the shortcomings or points raised
were tackled in the current study, which is the focus of this study.
Author (Year) Area of study focus Findings Research Gaps Focus of
current study
Bichanga, 2016
Njuguna, 2016
Ahmed &
Mayowa 2010
Chingaran de et
al., 2012
Bilawal, 2014
Wanjiru, 2013
2.6 conceptual framework
The model below indicates the potential connection amid the study variables. The
elements under scope are inflation rates, interest rates, foreign exchange rates, and FDI. The
independent variables are inflation rate as measured by quarterly CPI, exchange rates as
measured by annual average exchange rate between KSH and USD, and interest rates as
