Factors Affecting the Inflow of Foreign Direct Investment in Ethiopia
| dc.contributor.advisor | Sewale Abate (PhD) | |
| dc.contributor.author | Ermiyas Mekonnen | |
| dc.date.accessioned | 2024-02-09T13:50:46Z | |
| dc.date.available | 2024-02-09T13:50:46Z | |
| dc.date.issued | 2022-12-03 | |
| dc.description.abstract | This study aims to examine the determinants of inward FDI in Ethiopia over the period 47 years ranging from 1974-2020. Foreign direct investment (FDI) is one of the key sources of capital inflows and driver of economic growth and development in many developing countries. Ethiopia has recorded high level of success in mobilizing huge investment to support its economic growth. Ethiopia is one of the fastest growing countries in the world. This paper examines how macroeconomic stability, market size, trade openness, and infrastructure affecting FDI inflows in Ethiopia. The Unit root test and Co integration approach are applied to ensure that the regressions are not spurious. The empirical results support the hypothesis of the study that, inflation rate is found to have negative impacts on FDI inflows and the exchange rate, debt, trade openness, and infrastructure have positive effects on FDI inflows. However, foreign debt unlike the research hypothesis has a positive impact on FDI and the real gross domestic product is a proxy for market size has negatively affected the inflow of FDI. Furthermore, the effects of inflation rate, foreign debt, market size and trade openness on inward FDI are statistically insignificant. But exchange rate and infrastructure are significantly affecting the inflow of FDI in Ethiopia. Finally, the paper suggests that corresponding efforts should focus on strengthening the inflation rate, exchange rate, trade openness and infrastructure to ensure stability in macroeconomic performance, which enhances the confidence of foreign investors investing in Ethiopia. | |
| dc.identifier.uri | https://etd.aau.edu.et/handle/123456789/1747 | |
| dc.language.iso | en | |
| dc.publisher | A.A.U. | |
| dc.title | Factors Affecting the Inflow of Foreign Direct Investment in Ethiopia | |
| dc.type | Thesis |