Perceived Effect of E-government on Promotion of Foreign Direct Investment in Kenya

Abstract

Foreign direct Investment commonly referred to as FDI is the investment by one party in a business in another country. This study’s paramount objective is the perceived effect of E-government in the promotion of foreign direct investment in Kenya. The specific objectives for this research were to evaluate the role of information accessibility and reduced uncertainty, time efficiency, cost reduction and effective governance in the promotion of foreign direct investment in Kenya. The research adopted a descriptive research design where the target population was the 327 staff who are in Job groups L-N, P-R and the policy makers holding job groups S and above and working at three organizations that are engaged with the handling of foreign direct investment in Kenya, namely;) KenInvest, the Export Promotion Council, and the Ministry of Foreign Affairs. The study employed a multi-stage sampling technique in the selection of the respondents in the study where 87 samples were selected and 79.3% response rate achieved. Data was analyzed using descriptive measures of mean and standard deviation, and inferential statistics while presentation was done using tables. The results from the study reveal that there is a strong positive correlation that exists between e-government and the level foreign direct investment (r=0.477) and that the four e-government dimensions studied explains 22.8% of the attractiveness of foreign investors to a country. The regression coefficient variables suggest that time efficiency, cost reduction and governance had a significant effect on Kenya’s FDI with their respective p-values of 0.000 and 0.010 and 0.015 being less than study significant value of 0.05. However, information accessibility and reduced uncertainty were found to be insignificant in affecting the level of foreign direct investment in Kenya recording a p value of 0.312. Due to the positive relationship recorded between e-government and foreign direct investment, the researcher recommends that the government should enhance the efficiency of its e-government platform and make it more user-friendly and offer options in terms of language accessibility. Because the findings suggest that information accessibility and reduced uncertainty characteristics of e-government platform were not significant factors to the level of FDI, it is recommended that the government improves its e-governing structure with a view to attracting FDI