Contribution of foreign direct investment to job creation and skills development in selected multi-national companies in Kenya

Abstract

The purpose of this study was to determine the contribution of Foreign Direct Investment (FDI) to skills development and job creation in selected multi-national companies in Kenya. The study further investigated the challenges faced in promoting FDI. The study was carried out in Multinational Companies guided by the United Nations Conference for Trade and Development investment guide report 2012 in Nairobi County using both inferential and descriptive survey research design approaches to achieve its objectives. To establish whether there is a significant relationship between FDI and job creation, correlation analysis was done for macro-economic data on FDI inflows against the data on the number of jobs created in the economy of Kenya since 1980. This was further supported by a descriptive survey at the micro economic level to get the specific information from the Multi-national companies within the scope of study. According to the findings, and contrary to the internalization theory, the study concludes that there is a significant relationship between FDI and job creation and that Multi Nationals operating in Kenya contribute to skills development and job creation. The study also highlights that more needs to be done by the Kenya government through policy improvement and review to foster and retain FDI from the Multi-Nationals.