Determinants of Foreign Direct investment in Ethiopia: An Autoregressive Distributed Lag Approach
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Date
2019-11
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A.A.U.
Abstract
This paper attempts to study the determinant of FDI in Ethiopia for the time period from
1980-2015. To this end, the study has reviewed theoretical explanations relating to the
determinants of foreign direct investment and the study has also reviewed relevant empirical
literatures focusing on the determinants of FDI in the context of developing countries. Using
Data on foreign direct investment and number of telephone users that is obtained from United
Nations Conference on Trade and Development (UNCTAD). Real effective exchange rate,
inflation rate, export and import data were obtained from National Bank of Ethiopia (NBE),
and Ethiopia Real GDP from Ministry of Finance and Economic Development (MoFED). By
adopting model that was used by Erdal Demirhan etal (2008) this paper examine prominent
determinants of FDI and finds that economic growth, macroeconomic stability, openness to
trade are important determinants of foreign direct investment. The results suggest policy
makers should give due attention to promoting liberalization and implementing sound
economic policies that can ensure macroeconomic stability in the country.
Description
A thesis submitted to school of graduate studies, Addis Ababa University in partial fulfilment of the requirements for the degree of master of art in Total Quality Management
Keywords
ARDL, Economic Growth, Foreign Direct Investment