Regional Integration and Foreign Direct Investment in East African Countries
Journal of World Economic Research
Volume 2, Issue 4, August 2013, Pages: 67-74
Received: Aug. 14, 2013; Published: Aug. 30, 2013
Views 2735      Downloads 299
Authors
Manaseh Otieno, Kenya Institute for Public Policy Research and Analysis (KIPPRA), Nairobi, Kenya
Eliud Moyi, Kenya Institute for Public Policy Research and Analysis (KIPPRA), Nairobi, Kenya
Dickson Khainga, Kenya Institute for Public Policy Research and Analysis (KIPPRA), Nairobi, Kenya
Peter Biwott, Commission for Revenue Allocation, Nairobi, Kenya
Article Tools
PDF
Follow on us
Abstract
This study investigates the effect of regional integration on Foreign Direct Investment in East Africa Community countries. We apply Generalised Least Squares to examine this relationship. Regional integration did not have any effect on Foreign Direct Investment flows into the region. The degree of political risk and financial stability were positive and significant. The study recommends that Kenya and the other East Africa Community countries should institute political reforms to accompany integration in order to improve the country’s ratings in terms of the degree of political risk. They should also maintain a stable exchange rate regime.
Keywords
Foreign Direct Investment, East Africa Community, Regional Integration Agreement
To cite this article
Manaseh Otieno, Eliud Moyi, Dickson Khainga, Peter Biwott, Regional Integration and Foreign Direct Investment in East African Countries, Journal of World Economic Research. Vol. 2, No. 4, 2013, pp. 67-74. doi: 10.11648/j.jwer.20130204.11
References
[1]
Achandi, E.L. (2011). Effect of FDI on Export Performance in Uganda. Makerere University, Kampala Uganda.
[2]
Aggarwal, A. (2008). Regional Economic Integration and FDI in South Asia: Prospects and Problems. Indian Council for Research on International Economic Relations.
[3]
Ayanwale, A.B. (2007). FDI and Economic Growth: Evidence from Nigeria. Proceeding of the AERC Research paper 165 AERC, Nairobi.
[4]
Baltagi, H.B., Peter, E. and Pfattermayr, M. (2005). Estimating Regional Trade Agreement Effects on FDI in an Interdependent World. Syracuse University Center for Policy Research. Maxwell School of Citizenship and Public Affairs.
[5]
Basu, A. and Srinivasan, K. (2002). Foreign Direct Investment in Africa - Some Case Studies. IMF Working Paper, No 02/61, Washington DC.
[6]
Blomstrom, M. and Kokko, A. (1997). Regional Integration and Foreign Direct Investment. Working Paper series in Economics and Finance No. 172
[7]
Blomstrom, M. and Kokko, A. (2003). The Economics of Foreign Direct Investment Incentives. Working Paper 9489. National Bureau of Economic Research NBER, USA
[8]
Chen, L., Yu, C. and Huang, J. (2010). How The Regional Trade Agreement affects FDI. Based on Three-Country Footloose Capital model, School of International Business, Southwest University of Finance and Economics (SWUFE), Chengdu, China.
[9]
Day, J. (2010). The Relationship between Financial Crisis and Foreign Direct Investment. A Study of the 2007-2009 financial crisis and its impact onj FDI inflows to Mozambique and Tanzania. Submitted to Central European University. Dept of Public Policy. Budapest. Hungary.
[10]
Fernandez, R. (1997). Returns to Regionalism. An Evaluation of Non Traditional Gains From Regional Trade Agreements. The World Bank, International Economics Department, International Trade Division.
[11]
Jaumotte, F.(2004). Foreign Direct Investment and Regional Trade Agreements: The market Size effect revisited. International Monetary Fund. Working Paper. Middle East and Central Asia Department.
[12]
Kinuthia, K.B. (2010). Determinants of FDI in Kenya: New Evidence. Africa Studies Centre. Leiden, the Netherlands. University of Nairobi School of Economics, Nairobi Kenya. Paper submitted for the annual African International Business and Management (AIBUMA) conference Nairobi. August 2010.
[13]
Mwega, F.M. and Ngugi, R.W. (2007). Foreign Direct Investment in Sub Saharan Africa: Determinants, Origins, Targets, Impact and Potential. African Economic Research Consortium. Pp 119-143
[14]
Ng'eno, N. K., H. O. Nyangito, M. M. Ikiara, E. Ronge and J. Nyamunga (2001), "Regional Integration in East Africa: The Case of Kenya". Paper Submitted to the African Centre for Economic Growth (ACEG), Nairobi, Kenya.
[15]
Ngowi, P.H. (2001). Attracting New Foreign Direct Investment to Tanzania. Institute of Development Management, Mzumbe, Tanzania.
[16]
Ngugi, R.W. and Nyangoro, O. (2005). Institutional Factors and Foreign Direct Investment Flows: Implications for Kenya. Private sector Development Division. Kenya Institute for Public Policy Research and Analysis. KIPPRA Discussion Paper No. 48. Nairobi.
[17]
Obwona, B.M. (2002). Determinants of FDI and their impact on Economic Growth in Uganda. African Development Review. Vol. 13 Issue1, Pp 46-81.
[18]
Semwanga, J.P. (2011) FDI and Economic Growth; The case of Uganda (1970- 2007). Makerere University. Kampala. Uganda.
[19]
UNCTAD (2007). Africa Foreign Investor Survey 2005. Understanding the contributions of different investor categories to development implications for targeting strategies. 2nd Edition. Vienna: UNIDO.
[20]
UNCTAD (2010). Trade and Investment Report. New York: The United Nations.
[21]
UNDP (2010). Human Development Report. The Real Wealth of Nations: Pathways to Human Development
[22]
Worth, T. (2008). Regional Trade Agreements and Foreign Direct Investment.
ADDRESS
Science Publishing Group
1 Rockefeller Plaza,
10th and 11th Floors,
New York, NY 10020
U.S.A.
Tel: (001)347-983-5186