Increasing foreign direct investments to Kenya: an analysis of underlying factors
Date
2013
Authors
Schützeichel, Paul Maria
Journal Title
Journal ISSN
Volume Title
Publisher
Strathmore University
Abstract
This research studied a 14 year period of FDI inflows to Kenya (1998-2011) while
especially focusing on the seven year period of increasing FDI inflows from 2005 to
2011. Prior to this period of growth, a trend of stagnating FDI inflows can be
observed thus raising the question what factors exactly contributed to the rising FDI
inflows. The study included two types of analyses: (1) an analysis of publicly
available indices and (2) an analysis of primary data collected through questionnaires
which intended to confirm or dismiss the findings of the secondary analysis. Through
these analyses, the study revealed that the factors for the increasing FDI inflows
were: Kenya’s role as regional hub and the increasing regional cooperation and
integration, increasing market size and level of education, innovation and technology
embraced within the local market, the ease of doing business in Kenya and
infrastructure development. Surprisingly, other factors such as political stability,
inflation, rule of law and corruption levels even deteriorated during the period of
growth. In general, this research was conducted to explain the reasons behind the
increasing FDI inflows to Kenya and thus reveals important information for fellow
researchers, policy makers and foreign companies. The implications of the study
were for the government to strongly focus on increased regional cooperation and
integration and to further improve the ease of doing business among others. This
research contributes to existing knowledge by establishing factors for increasing FDI
inflows to developing countries in general and Kenya in specific.
Description
Submitted in partial fulfillment of the requirements for the Degree of a Master of Commerce
Keywords
Foreign Direct Investments, Kenya