The Link between Institutional Quality and Foreign Direct Investment in Africa: The Case of Ethiopia and Kenya
| dc.contributor.advisor | G/Selassie, Kidist (Dr) | |
| dc.contributor.author | Wosenyeleh, Elbetel | |
| dc.date.accessioned | 2020-09-21T08:15:53Z | |
| dc.date.accessioned | 2023-11-18T12:19:37Z | |
| dc.date.available | 2020-09-21T08:15:53Z | |
| dc.date.available | 2023-11-18T12:19:37Z | |
| dc.date.issued | 2020-07 | |
| dc.description.abstract | Foreign direct investment (FDI) is one of the inputs to economic growth. The purpose of this study is to examine the effect of institutional quality on FDI inflows in Ethiopia and Kenya over the period of 1996-2018 by using descriptive and econometric methods. The study used descriptive and econometric methods to establish empirical establish empirical link between institutional quality and FDI on Ethiopia and Kenya. Overall, the trend of institutional quality indicators and FDI inflows (as a % of GDP) into Ethiopia and Kenya has been increasing from the period 1996-2018. The findings of the study show that, on average, a number of the institutional quality variables (voice and accountability, political stability and absence of violence/terrorism, government effectiveness, and regulatory quality) for Ethiopia is significantly less than that of Kenya. On the other hand, the estimated average control of corruption for Kenya is less than the average for Ethiopia and thus, Kenya should improve its performance on this indicator. There is no evidence of significant difference in the estimated average of rule of law in both countries. There is a higher variability of political stability and absence of violence/terrorism, government effectiveness, and control of corruption in Ethiopia. The stationary of the variables has been checked by using Augmented Dickey Fuller and Phillips-Perron unit root test and hence the variables are found to be stationary at first difference. Autoregressive distributed lag (ARDL) is is used to test the presence of long-run relationship between time series data and the ARDL Bounds cointegration test also shows that there is a long-run relationship between the dependent and independent variables for Ethiopia. In the long-run, political stability and absence of violence/terrorism, regulatory quality and rule of law are important in attracting foreign direct investment to Ethiopia. | en_US |
| dc.identifier.uri | http://etd.aau.edu.et/handle/12345678/22403 | |
| dc.language.iso | en_US | en_US |
| dc.publisher | Addis Ababa University | en_US |
| dc.subject | The Link between Institutional Quality and Foreign Direct Investment in Africa: The Case of Ethiopia and Kenya | en_US |
| dc.title | The Link between Institutional Quality and Foreign Direct Investment in Africa: The Case of Ethiopia and Kenya | en_US |
| dc.type | Thesis | en_US |