35 Records out of 22207 Records

Factors affecting Kenya Commercial Bank as an outward foreign direct investment

Author: Wanjie, Daisy Njeri

Awarding University: University of Nairobi, Kenya

Level : MBA

Year: 2012

Holding Libraries: University of Nairobi Jomo Kenyatta Memorial Library ;

Subject Terms: Kenya Commercial Bank/Foreign investment/Business growth/Commercial banks/Banking industry ;

Abstract:

The purpose of this study was to establish the factors affecting KCB Bank Ltd as an outward FDI. This study sought to answer the question of why the bank has been successful as a regional bank and what challenges the bank has faced in its regionalization strategy. This study is of significance to other banks that may have interest in expanding regionally since they can learn from KCB. This research adopted a descriptive case study approach to determine the factors affecting KCB as an outward FDI in the eastern African region. The study used primary data which was collected through interviews. The Kenya Commercial Bank Ltd officials interviewed included the head of marketing, head of operations, head of human resource and head of finance. Content analysis was used to analyze the data collected. The study findings indicated that KCB is a successful outward FDI due to many factors including being a first mover, leading-edge management practices, adapting to local market conditions and incorporating experienced local managers in subsidiary operations. Following the findings, companies seeking to invest in other countries other than- their home country should use strategies which aim at tailoring existing products to better fit the needs of market they seek to target. Secondly, FDls should give some form of autonomy to their subsidiaries such that they can be able to make some crucial decisions mostly -in marketing and product development. Finally, host countries should make their countries attractive such that many FDls should invest in them to bring advantages that are associated by such investments.

The role of business licensing as a factor influencing foreign direct investment in Kenya

Author: Wamugi, Ruth Wairimu

Awarding University: University of Nairobi, Kenya

Level : MBA

Year: 2012

Holding Libraries: University of Nairobi Jomo Kenyatta Memorial Library ;

Subject Terms: Licensing/Foreign investment ;

Abstract:

Foreign direct investment is important in a developing country where there exist a high level of unemployment and generally a need to improve the livelihood of the people. In this context therefore, there is need for a country to develop a conducive business environment that will attract the same the foreign investors and establishment of one stop shop where all enquiries pertaining to both local and foreign investment in the country will be available, is such one step. Licensing process in a country will also affect the rate of investment by foreign investors. Towards the realization of the same objective, a descriptive research design was adopted in which questionnaires were distributed to Kenya Investment Authority and the Ministry of Local government offices. The respondents had attained different academic qualification and years of experiences in dealing with implementation of the institutions strategies for attracting direct foreign investment in the country. As a result, they were found to be knowledgeable to the research subject area. The findings of the study were that foreign investors are majorly concerned with the operating cost of their businesses and as well as the security of their investment. The respondents pointed out that before 2008, the country had multiple licensing agencies which in most cases had duplicating functions but it was also realized that this has been remedied by the coming up of a central bureau of licensing new businesses. The licensing process of foreign investor has been hampering the level of FDI coming to the country over time. The respondents observed that after the country coming up with a one stop shop where all prospective investors -both local and foreign- seek advice and all requirements pertaining to licensing in the office. Attraction of direct foreign investment to a country is of importance in terms of creating employment and increasing the general economic development of the country. Therefore, it is important that a country establishes all necessary mechanism that will attract these investors. The necessary conditions such as efficient communication and road network should be availed and the cost of production also are made affordable through a supply of affordable labour, raw materials and power for running the factories.

Determinants of foreign direct investment in Kenya

Author: Kinuthia, Edward Martin Macharia

Awarding University: University of Nairobi, Kenya

Level : MSc

Year: 2012

Holding Libraries: University of Nairobi Jomo Kenyatta Memorial Library ;

Subject Terms: Foreign investment/Economic conditions ;

Abstract:

The objective of this study was to analyze the relationship between capital flows and Foreign Direct Investment (FDI) in Kenya. The study establishes the primary factors responsible for affecting capital flow in Kenya in relation to Foreign Direct Investment (FDI) in Kenya. Furthermore this paper attempts to investigate the relative influence of these factors to FDI. With the help of multiple regression model and Factor analysis the primary factors are traced out. In the study, the determinants of foreign direct investment were established and estimated. Multicollinearity problem is taken into consideration among different independent variables and there is an attempt to eliminate them. Statistical methods were used to do the analysis based on yearly basis database of different economic factors. Finally some relationships of those factors with FDI inflow were found. In the context of Kenyan economy, decrease of external debt and inflation will bring in more foreign exchange reserve which will act as stimulant to foster growth. One of the recommendations was government policies should be directed towards improving the fundamentals of the economy, such as Gross Domestic Product and total external debts, if the intention is to attract capital inflows. Also, monetary policy should be managed accordingly so as to control inflation rates. Finally, contractionary measures should be adopted in the fiscal policy so as lower real interest rates. As for recommendations to academia, it was established that Current account is irrellevant in determining the FDI inflows in Kenya. Also, the study recommends multiple regression analysis and factor analysis as statistical methods of choice when analyzing capital flow determinants.

The impact of foreign aid on economic growth in Kenya

Author: Kiumbe, James Muriithi

Awarding University: University of Nairobi, Kenya

Level : MA

Year: 2012

Holding Libraries: University of Nairobi Jomo Kenyatta Memorial Library ;

Subject Terms: Impact analysis/Foreign aid/Economic growth/Economic expansion/Foreign investment ;

Abstract:

In economic terms, the justification of giving aid is basically to help push up Gross Domestic Product CGDP) of the recipient nations. In most cases, the beneficiaries are poor countries usually grappling with the twin challenges of low domestic savings and weak foreign exchange revenues. Such deficits mean the countries can hardly meet lheir economic growth goals meaning they have to seek capital resources in the form of donor aid and foreign direct investments to help prop up economic expansion. Over the years, debate has ensued over the effectiveness of aid, with scholars from both poor and rich countries unable to reach consensus over the same. In many Sub Saharan States, most studies have failed to establish a strong statistical link between economic growth and aid. Comparatively, in other regions, aid has directly yielded economic growth. This paper seeks to establish and explain the strong and consistent relationship between aid, investment and economic expansion in Kenya. The study uses a structural growth model involving aid and other control variables for the period 1970-2010. By applying causality tests, the paper establishes that, during the period under study, aid does not trigger a positive push on investment and economic expansion. However, there is a positive relationship between investment and economic growth. After carrying out a regression analysis on the model, the study establishes that aid causes a negative effect on economic expansion. The finding that aid has direct impact on growth in the structural model and that investments drive growth implies that aid is usually not invested but instead it is channeled to other expenses. Since aid is used for other purposes like salary hike payments and purchase of gasguzzler vehicles, this triggers increase in consumption which leads to increase in investments and thus growth. This is usually so when it comes to Kenya where this paper finds there lacked a strong relationship between economic expansion and aid.

Impact of public and private investment on economic growth in Kenya

Author: Kimitei, Grace Jemeli

Awarding University: University of Nairobi, Kenya

Level : MA

Year: 2012

Holding Libraries: University of Nairobi Jomo Kenyatta Memorial Library ;

Subject Terms: Investments/Foreign investment/Economic growth ;

Abstract:

As countries strive to develop, increasing their level of output remains a major concern. Contributions of private and public investment are important in realizing this. It is argued that private investment is an important strategy of achieving economic growth through its ability to stimulate economic activities by expanding the capacity for production of goods and services. On the contrary, contribution of public investment has received mixed arguments. The study sought to shed light on the contribution of both private and public investment, and other factors namely; labour force-proxied by population, government expenditure, inflation, foreign direct investment, openness to trade and foreign aid on economic growth. The study utilized time series data from various editions of Economic Survey from the period 1970 to 2011. The data was tested for time series properties and then OLS regression analysis was carried out. The findings indicated that private and public investment, foreign direct investment, and openness to trade are significant and positively contribute to growth in output. However, labour force as proxied by population has a negative significant contribution. In addition, government expenditure, inflation and foreign aid were found to be insignificant. Based on the findings, the study advocates for efficient policies geared towards increasing private and public investment, openness to trade, and those aimed at controlling population growth.

The impact of exchange rate fluctuation on foreign direct investment in Kenya

Author: Otieno, Ben Felix Omondi

Awarding University: University of Nairobi, Kenya

Level : MBA

Year: 2012

Holding Libraries: University of Nairobi Jomo Kenyatta Memorial Library ;

Subject Terms: Impact analysis ; Foreign exchange rates ; Foreign investment ;

Abstract:

Kenya has been the business-hub for East and Central Africa and is keen to retain this status towards realizing the vision 2030. Such regional economic leadership cannot be financed solely by domestic capital hence the need for foreign direct investments'to cover the gaps in her socio-economic agenda towards the vision. The main objective of this research project hence is to examine the impact of exchange rate fluctuations on the much needed foreign direct investments in Kenya. The exchange rate regimes in Kenya have been influenced through historical government macroeconomic policy from fixed exchange rate regimes to pegged and later floating through liberalization in the nineties. The exchange rates have been characterized by significant fluctuations with the local currency hitting historical highs and lows. This volatility of the nominal exchange rates might have an impact in attracting of foreign capital inflows into the country yet no study has been carried out so far in Kenya to determine the correlation between these two variables. The methodology used in this study considered all the sectors of the Kenyan economy as the target population for this research project. Time series data for exchange rate fluctuation and foreign direct investments to Kenya between 1981 and 2010 were collected 'from Central Bank of Kenya and the World Bank Country data websites for analysis. The standard deviations for the exchange rates were derived for each year under study to determine the fluctuations. The absolute figures of the foreign direct investments data to Kenya was transformed through logarithmic transformation for normalization purposes. Pearson moment correlation was used to examine the relationship between exchange rate fluctuations and foreign direct investments over the period of study. The variables were plotted against on a graph and a best line of fit determined to generate the linear statistical model for their relationship.The findings of this research were as follows; there is a weak correlation between exchange rate fluctuations and foreign direct investments. There also exists a positive relationship between exchange rate fluctuations and foreign direct investments. This means that an increase in the exchange rate fluctuations leads to an increase in the foreign capital inflows. However the later finding is made less significant by the weak relationship between the two variables. Hence the conclusions drawn from this study finding suggest that the impact of exchange rate fluctuations in attracting FDI is insignificant. This study recommends that policy makers should put less effort in influencing exchange rates fluctuations in the bid to attract foreign direct investments to the country to fuel our Vision 2030 pillars. Howevermore effort and further research should be focused on the other determinants of FDI with significant impact on the inflows. With emerging sectors like the energy sector and the growing interest in emerging markets in Africa by Nations like China, it would be good for more research to be conducted using alternative methodologies to improve knowledge on the main determinants of FDI to enable Kenya not only retain its economic leadership in the region but also attain mid-income level.

The relationship between exchange rates and foreign direct investment in the horticulture industry in Kenya

Author: Ogada, Janet Amondi

Awarding University: University of Nairobi, Kenya

Level : MBA

Year: 2012

Holding Libraries: University of Nairobi Jomo Kenyatta Memorial Library ;

Subject Terms: Exchange rates ; Foreign investment ; Horticulture ;

Abstract:

Several studies have established that exchange rate movement impact on FDI. When a currency depreciates, meaning that its value declines relative to the value of another currency, this exchange rate movement has two potential implications for FDI. First, it reduces that country's wages and production costs relative to those of its foreign counterparts. All else equal, the country experiencing real currency depreciation has enhanced locational advantage or attractiveness as a location for receiving. productive capacity investments. By this relative wage channel, the exchange rate depreciation improves the overall rate of return to foreigners contemplating an overseas investment project in this country and vice versa for a currency appreciation (Goldberg, 1993). The type of research design was the causal study that relies on control factors. The study employed a survey of horticulture industries within the period of study. The population of the study consisted of 30 horticulture companies that traded in the period 2000 to 2010 in Kenya. The study used secondary sources of data from the UNCTATED, HCDA, KFC and Investment Promotion Council for the respective horticulture companies over the period. Data collected was used to calculate and analyse export of goods and services, Import of goods and services, exchange rates, Goss domestic product, interest rates, openness of the economy and wages for the period under study. The study established that there is a relationship between foreign direct investment and export of goods and services, exchange rate, gross domestic product, interest rates and openness of the economy. This study recommends that government to use various economic stimulus programs in order to boost the country's gross domestic product as this will positively influence foreign direct investment in the horticultural sector, the government should also provide a conducive environment that will encourage FDI into the horticulture industry, and this may include boosting infrastructure and beefing up security in the country. The study also recommends the government through various stakeholders in the agricultural sector to have standardized wage rates, as it is, the study found that increase in wages in the sector negatively affected the foreign direct investment into the sector, this will help in increasing foreign direct investment in the horticultural sector.

Relationship between foreign direct investment, financial market development and economic growth in Kenya

Author: Okello, Philbert Agallo

Awarding University: University of Nairobi, Kenya

Level : MBA

Year: 2012

Holding Libraries: University of Nairobi Jomo Kenyatta Memorial Library ;

Subject Terms: Foreign investment ; Securities markets ; Economic growth ;

Abstract:

The contribution of foreign direct investment (FDI) to economic growth has been debated quite extensively in the literature. This debate has focused on the channels through which FDI may help to raise growth in recipient countries. In particular, it has been discussed to what extent FDI may enhance technological change through spill over effects of knowledge and new capital goods. This study sought to achieve two objectives: examine the trend of FDI, financial market development, and economic growth in Kenya and to establish the relationship between FDI, fmancial market development, and economic growth in Kenya. The study used inferential research design to find out the relationship between independent variables and dependent variables of the study. Secondary data was used in this study. The data was analysed using descriptive analysis and multiple regression analysis, The study found that market capitalization had a positive and significant impact on GDP growth (0.098). The results also show that FDI had a positive but insignificant impact on GDP growth. The study concludes that financial markets influence the economic growth of Kenya. The study also concludes that economic growth in Kenya is not significantly influenced by the level of FDI inflows. The study recommends that Kenya needs to improve further the stock market development especially by crafting policies that will boost the performance of the stock market through the market capitalization. The study also recommends that the Government needs to put up measures that will help attract the foreign direct investment inflows as the levels are still very low and this has not led to any significant contribution to the country's economic growth.

The relationship between tax incentives and foreign direct investment in Kenya

Author: Musyoka, Kasango

Awarding University: University of Nairobi, Kenya

Level : MBA

Year: 2012

Holding Libraries: University of Nairobi Jomo Kenyatta Memorial Library ;

Subject Terms: Tax incentives ; Foreign investment ;

Abstract:

The main objective of this study was to determine the relationship between tax incentives and foreign direct investment in Kenya. In order to achieve this objective, the entire set of data for investment incentives, trade related incentives, import duty exemptions and foreign direct investments inflows for ten most recent years was collected Basic analysis begun with the determination of various measures of central tendency; namely mean, minimum and maximum. Standard deviation was used as measures of dispersion (variation). Calculations were carried out for correlation, regression and significance tests. In line with the objectives data for tax incentives and foreign direct inflows was obtained. Three measures of performance were used in arriving at the conclusion; they were loss of revenue due to investment incentives, loss of revenue due to trade related incentives, import duty exemptions and net inflows of foreign direct investment. The data for ten most recent years was computed and analyzed. The correlation and regression analysis was performed to establish the relationship between the dependent and independent variables. The results of all the measures of performance showed no significance difference when correlated with the foreign direct investment. Both investment incentives, trade related incentives and import duty exemptions showed a significance level of above 0.05. From the above results, the research concludes that there was no significance improvement in foreign direct investment as a result of implementing tax incentives in Kenya.

Challenges of foreign direct investment faced by firms in the apparel manufacturing industry in the Kenyan Export Processing Zones

Author: Maru, Hiten

Awarding University: University of Nairobi, Kenya

Level : MBA

Year: 2012

Holding Libraries: University of Nairobi Jomo Kenyatta Memorial Library ;

Subject Terms: Foreign investment ; Clothing industry ; Business conditions ; Export Processing Zones, Kenya ;

Abstract:

Foreign Direct Investment (FDI) is a complex foreign market entry mode which involves the ownership and control of assets in a foreign market or direct ownership of facilities in the target country. Foreign Direct Investment contributes to the growth of domestic firms through complementarities in production and productivity spillovers. With the ever-changing environment, entry mode decisions and how to cope with such changes are very challenging to International Business Managers as wrong decisions could be irreversible and costly on the long run. Kenya has been involved in Global trade for many years, but mainly in the agricultural sector and with the US Congress passing the African Growth and Opportunity Act (AGOA) in 2000, and enhanced by the formation of the Export Processing Zones (EPZ) in Kenya, there is renewed interest in the once declining apparel manufacturing industry with the inflow of Foreign Direct Investments into the apparel sector mainly within the Export zones in order to reap the incentives offered by the EPZ Scheme. With the window of opportunity presented by AGOA which provided the major market expected to close in September 2015 and compounded by other challenges like the deterioration of the Kenyan infrastructure, port congestion, poor supply and cost of electricity, and high cost of labor, this study attempted to investigate the challenges of Foreign Direct Investment faced by firms in the apparel manufacturing industry in the Kenyan export processing zones and the measures adopted by the firms in dealing with the challenges. Data for the study was collected from fourteen out of the fifteen FDI firms in the apparel manufacturing industry in the Kenya export processing zone using drop and pick method. Analysis of the data concluded that fiscal policy, state and cost of infrastructure, customs regulations and market and product are the major sources of challenges. The study highlighted that political, legal and social variables, human resource variables are not major challenges with land related challenges not a challenge.EPZ Authority generated measures were the most effective measure in dealing with the challenges faced by the FDI. However, others such as corporate social responsibility measures, in-house generated measures, parent _ company generated and globally outsourced measures equally play a pivotal role in helping deal with the effects of the challenges. Trade organization /affiliates, Nongovernmental /lobby groups and other Kenya Government ministry /agency were providing the least assistance to overcome the challenges. A study on the factors that promote effective growth of foreign direct investment in apparel manufacturing industry in Kenya, a comparative study on challenges that affect locally owned and foreign direct investment in apparel manufacturing industry in Kenya and a study on the service levels, the strengths and effectiveness of the Export processing zones authority is recommended. The Government by strengthening the EPZ Authority, ministries and affiliates should facilitate more interaction with the foreign direct investors to overcome the challenges. The investors on their part should form lobby group to enable them to market their product more easily.