| dc.description.abstract | Foreign direct investment (FDI) plays important role in achieving rapid economic growth
through bringing the latest technology and management know-how and bridging the gap
between domestic savings and investment. Kenya has recently experienced a hit in
foreign direct investment following a period of substantial decline of FDI inflows. The
net FDI inflows in Kenya has been declining and also highly volatile despite friendly
economic environment and improved polices implement to so as to attract and retain FDI
and accelerate her economic growth and development. The study aims at investigating
the relationship between the determinants of foreign direct investment and the economic
growth of selected sectors in Kenya. The target population is the seventeen activities as
listed in the Kenya facts and figures (KNBS, 2014). Theories applied in the study
included; Market Imperfection Theory; Internalization Theory; Eclectic Paradigm and
Solow Type Growth Theory. Descriptive research design was used while data collected
covered a period of five (5) years from 2011 to 2015. Descriptive research design is
adopted and census used. Secondary data was obtained from the Central bank of Kenya
publications, the Kenya National bureau of statistics publications, International Monetary
Fund (World Economic Outlook Database) publication and the World Bank (WDI. The
study used panel data model which included dependent variable as economic growth
while independent variables was market size, economic openness and cost of labor.
Diagnostic tests included panel unit root test, multi collinearity, serial correlation,
Heteroscedasctity and cross sectional dependence test and due to violence of CLRM,
Hausman specification test used to evaluate the aptness of either the fixed model or
random model to be used was not done instead the model was fitted using Robust
Standard Errors. The Ms-Excel and STATA was used to analyze the data. | en_US |
