An Independent Study on the Impact of Foreign Direct Investment on the Kenyan Economy

Abstract

The researchers carried out an independent study which sought to analyze the impact of foreign direct investment on diverse economies in various countries of the world. The study reviewed a total of fifteen journal papers obtained from credible peer reviewed journals. Foreign direct investment (the independent variable) was measured in log form to enhance accuracy and the economy (the dependent variable) was measured by the gross domestic product, inflation rate and the balance of payment. There was a unanimous agreement by the authors that foreign direct investment affect host country’s economic growth through physical capital accumulation, technology spillovers, creation of employment opportunities and enhancing productivity by bringing competition to the economy through skills and knowledge transfer. The review noted that no recent research has been done on the trends, determinants and pattern of foreign direct investment in Kenya and published in a credible peer reviewed journal.