Authors :
Gabriel Omondi Odero; Kipkoech Cheruiyot
Volume/Issue :
Volume 7 - 2022, Issue 12 - December
Google Scholar :
https://bit.ly/3IIfn9N
Scribd :
https://bit.ly/3H2YLdZ
DOI :
https://doi.org/10.5281/zenodo.7564388
Abstract :
Foreign Direct Investment’s patterns on the
Kenyan economy has been minimally investigated by
researchers, notwithstanding its hypothetical dynamics it
experiences from other covariates in the Kenyan
economy. This study was aimed at examining the effect
of Gross Domestic Product (GDP) and capital formation
on the Kenyan economy. The study used annual FDI,
GDP and capital accumulation datasets from the World
Bank Sources. The analysis entailed multiple regression
modelling, with the assumptions of ordinary least square
models such as linearity, heteroskedasticity factored.
The results informed that GDP and capital formation
had a negative effect on FDI in Kenya. Furthermore,
GDP proved statistically insignificant in predicting
annual FDI, whereas capital formation and the intercept
registered significant effects. The findings also informed
that FDI would still be positive in the absence of
covariates. The study vouched for the need for the
Kenyan Government to encourage more investments to
enhance capital formation and better the investment
landscape in the country. Moreover, the Government
through treasury should undertake cost benefit analysis
to assess the significance of the FDI injected into the
economy
Foreign Direct Investment’s patterns on the
Kenyan economy has been minimally investigated by
researchers, notwithstanding its hypothetical dynamics it
experiences from other covariates in the Kenyan
economy. This study was aimed at examining the effect
of Gross Domestic Product (GDP) and capital formation
on the Kenyan economy. The study used annual FDI,
GDP and capital accumulation datasets from the World
Bank Sources. The analysis entailed multiple regression
modelling, with the assumptions of ordinary least square
models such as linearity, heteroskedasticity factored.
The results informed that GDP and capital formation
had a negative effect on FDI in Kenya. Furthermore,
GDP proved statistically insignificant in predicting
annual FDI, whereas capital formation and the intercept
registered significant effects. The findings also informed
that FDI would still be positive in the absence of
covariates. The study vouched for the need for the
Kenyan Government to encourage more investments to
enhance capital formation and better the investment
landscape in the country. Moreover, the Government
through treasury should undertake cost benefit analysis
to assess the significance of the FDI injected into the
economy