Relationship between foreign direct investment

Abstract

The contribution of foreign direct investment (FDI) to economic growth has been debated quite extensively in the literature. This debate has focused on the channels through which FDI may help to raise growth in recipient countries. In particular, it has been discussed to what extent FDI may enhance technological change through spill over effects of knowledge and new capital goods. This study sought to achieve two objectives: examine the trend of FDI, financial market development, and economic growth in Kenya and to establish the relationship between FDI, financial market development, and economic growth in Kenya. The study used inferential research design to find out the relationship between independent variables and dependent variables of the study. Secondary data was used in this study. The data was analysed using descriptive analysis and multiple regression analysis.