The Role of Foreign Direct Investment for the Export Growth of Leather Industry in Ethiopia
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Date
2017-07
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Addis Ababa University
Abstract
Exports play a vital role in the economic growth of a country. This study tries to examines the role
of FDI in export growth of leather industry in Ethiopia. A primary data collected from 15 FDI
firms in the leather sector of Ethiopia through surveying and interviewing the General
Managers, Marketing Managers, Finance Managers and Production Managers. In addition,
secondary data also collected from different government institutions like LIDI, ERCA, FIC CSA
and MOI to strengthen the research work. In analyzing the role of FDI in leather, sector export
and basic determinants descriptive statistics utilized. The analysis shows the export share of FDI
firms reaches 70 per cent of the total leather sector export values. This export volume is very
high when compared with local firms, which have long-term involvement in the sector. The study
also shows FDI’s vital role in product diversification, value addition, skill transfer, opening new
market route for local firms across value chain. Therefore, in order to increase and maintain the
role of FDI for export growth of the leather sector strong institutional support needed from
government and stakeholders.
Capacity building for all actors in the chain, especially for
domestic firms to enter international market competition were recommended.
Keywords: foreign direct investments, Ethiopia, leather sector exports
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Keywords
Foreign direct investments, Ethiopia, Leather sector exports