Regional Integration and Foreign Direct Investment in East African Countries

Manaseh Otieno; Eliud Moyi; Dickson Khainga; Peter Biwott

doi:doi:10.11648/j.jwer.20130204.11

| Peer-Reviewed

Regional Integration and Foreign Direct Investment in East African Countries

Manaseh Otieno, Eliud Moyi, Dickson Khainga, Peter Biwott

Published in Journal of World Economic Research (Volume 2, Issue 4)

Received: 14 August 2013 Published: 30 August 2013

Views: Downloads:

Download PDF

Share This Article

Twitter
Linked In
Facebook

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.

Published in	Journal of World Economic Research (Volume 2, Issue 4)
DOI	10.11648/j.jwer.20130204.11
Page(s)	67-74
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2013. Published by Science Publishing Group

Keywords

Foreign Direct Investment, East Africa Community, Regional Integration Agreement

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.

Cite This Article

Plain Text BibTeX RIS

APA Style

Manaseh Otieno, Eliud Moyi, Dickson Khainga, Peter Biwott. (2013). Regional Integration and Foreign Direct Investment in East African Countries. Journal of World Economic Research, 2(4), 67-74. https://doi.org/10.11648/j.jwer.20130204.11

Copy | Download

ACS Style

Manaseh Otieno; Eliud Moyi; Dickson Khainga; Peter Biwott. Regional Integration and Foreign Direct Investment in East African Countries. J. World Econ. Res. 2013, 2(4), 67-74. doi: 10.11648/j.jwer.20130204.11

Copy | Download

AMA Style

Manaseh Otieno, Eliud Moyi, Dickson Khainga, Peter Biwott. Regional Integration and Foreign Direct Investment in East African Countries. J World Econ Res. 2013;2(4):67-74. doi: 10.11648/j.jwer.20130204.11

Copy | Download

@article{10.11648/j.jwer.20130204.11,
  author = {Manaseh Otieno and Eliud Moyi and Dickson Khainga and Peter Biwott},
  title = {Regional Integration and Foreign Direct Investment in East African Countries},
  journal = {Journal of World Economic Research},
  volume = {2},
  number = {4},
  pages = {67-74},
  doi = {10.11648/j.jwer.20130204.11},
  url = {https://doi.org/10.11648/j.jwer.20130204.11},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jwer.20130204.11},
  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.},
 year = {2013}
}

Copy | Download

TY  - JOUR
T1  - Regional Integration and Foreign Direct Investment in East African Countries
AU  - Manaseh Otieno
AU  - Eliud Moyi
AU  - Dickson Khainga
AU  - Peter Biwott
Y1  - 2013/08/30
PY  - 2013
N1  - https://doi.org/10.11648/j.jwer.20130204.11
DO  - 10.11648/j.jwer.20130204.11
T2  - Journal of World Economic Research
JF  - Journal of World Economic Research
JO  - Journal of World Economic Research
SP  - 67
EP  - 74
PB  - Science Publishing Group
SN  - 2328-7748
UR  - https://doi.org/10.11648/j.jwer.20130204.11
AB  - 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.
VL  - 2
IS  - 4
ER  -

Copy | Download

Author Information

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

Download PDF

Sections

Plain Text BibTeX RIS

APA Style

Manaseh Otieno, Eliud Moyi, Dickson Khainga, Peter Biwott. (2013). Regional Integration and Foreign Direct Investment in East African Countries. Journal of World Economic Research, 2(4), 67-74. https://doi.org/10.11648/j.jwer.20130204.11

Copy | Download

ACS Style

Manaseh Otieno; Eliud Moyi; Dickson Khainga; Peter Biwott. Regional Integration and Foreign Direct Investment in East African Countries. J. World Econ. Res. 2013, 2(4), 67-74. doi: 10.11648/j.jwer.20130204.11

Copy | Download

AMA Style

Manaseh Otieno, Eliud Moyi, Dickson Khainga, Peter Biwott. Regional Integration and Foreign Direct Investment in East African Countries. J World Econ Res. 2013;2(4):67-74. doi: 10.11648/j.jwer.20130204.11

Copy | Download

@article{10.11648/j.jwer.20130204.11,
  author = {Manaseh Otieno and Eliud Moyi and Dickson Khainga and Peter Biwott},
  title = {Regional Integration and Foreign Direct Investment in East African Countries},
  journal = {Journal of World Economic Research},
  volume = {2},
  number = {4},
  pages = {67-74},
  doi = {10.11648/j.jwer.20130204.11},
  url = {https://doi.org/10.11648/j.jwer.20130204.11},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jwer.20130204.11},
  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.},
 year = {2013}
}

Copy | Download

TY  - JOUR
T1  - Regional Integration and Foreign Direct Investment in East African Countries
AU  - Manaseh Otieno
AU  - Eliud Moyi
AU  - Dickson Khainga
AU  - Peter Biwott
Y1  - 2013/08/30
PY  - 2013
N1  - https://doi.org/10.11648/j.jwer.20130204.11
DO  - 10.11648/j.jwer.20130204.11
T2  - Journal of World Economic Research
JF  - Journal of World Economic Research
JO  - Journal of World Economic Research
SP  - 67
EP  - 74
PB  - Science Publishing Group
SN  - 2328-7748
UR  - https://doi.org/10.11648/j.jwer.20130204.11
AB  - 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.
VL  - 2
IS  - 4
ER  -

Copy | Download