The Socia-economic Impacts of Foreign Direct Investment inflows
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Date
2014-06
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Addis Ababa University
Abstract
Foreign direct investment is one of the most striking features of the global economy
today. Understanding this, the government of Ethiopia had issued several investment
incentives to encourage the inflows of foreign direct investment. Thus, this study has
attempted to identifY and investigate the socia-economic impacts of foreign direct
investment inflows to Bishoflu town.
To achieve this objective primary and secondary data were collected which is
quantitative and qualitative in nature. To obtain this data, questionnaire, FGD and KII
was employed where as to collect secondary documented data from different institutions.
The main source of data for the study was employees working in selected six (6) foreign
firms. The study also employed both probability and non probability sampling
techniques. Probability sampling techniques has been used to select respondents from all
workers who have been working in selected foreign firms. Purposive sampling method
was also employed to collect data from focus group discussants and interviewees which
were mainly used to triangulate data collected through questionnaire.
The result of the study showed that the inflows of Foreign Direct Investment in to the
area have potential Socia-economic contributions and Socia-economic problems. These
contributions are job creation, technology transfer, income generation, increasing saving
levels of employees, providing of social and economic infrastructure. The problems are
failure of the firms to fill the skill gap of employees in use of technology, the farming
comfinmity loss productive asset, environmental pollution, distraction social institution
and unwise use of investment land.
Based on the major finding of the thesis, recommendations were forwarded that could
solve the problems. In this regard, improving the skill gap of employees, providing
comprehensive approach that enable community to diversifo sources of income, creating
awareness, providing technical support for local community and strengthening follow up
and after care services are the area that needs emphasis by concerned Regional and
local bodies to solve these problems.
Key words: Foreign direct investment and Socio-economic impacts
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Keywords
Foreign direct investment, and Socio-economic impacts