The role of public and private sector transparency on foreign direct investment in Kenya, Uganda And Tanzania
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Date
2013-10Author
Nyamache, Davis O
Type
ThesisLanguage
enMetadata
Show full item recordAbstract
The poor performance of most developing countries in inward FDI flows is largely
attributed to the scope of government intervention in the economy, weak systems of
governance and slow progress integrating into the global economy. Given that there have
been low FDI inflows to most developing countries over the past years, it is important to
examine what role transparency could play in attracting FDI in East African countries
especially Kenya, Uganda and Tanzania. This study seeks to examine the role of public
and private sector transparency in explaining inward FDI flows to developing countries.
This study intends to examine two types of transparency: public sector transparency and
private sector transparency. This was a correlation design where secondary data was
collected from various sources for the period 2003 – 2011. The dependent variable was
FDI inflows and the independent variables were public transparency and private
transparency. A number of macroeconomic variables were also modeled as control
variables. The analysis was run with SPSS software using descriptive analysis,
correlation analysis, and multiple regression analysis. The study found that private sector
transparency had a positive and significant impact on FDI inflows, p < 0.01. The study
further revealed that public sector transparency has a positive and significant impact on
FDI inflows in developing countries, p < 0.05. The study concludes that both public and
private transparency have a positive and significant impacts on FDI inflows in East
Africa. The study also concludes that private transparency has a higher impact on FDI
inflows than government transparency in East Africa. The study recommends that
developing countries should take advantage of FDI in cross border mergers and
acquisitions by providing adequate disclosure of company financial information. Such
information improves the ability of investors to evaluate company performance
accurately. Host governments can facilitate private sector transparency by providing the
requisite legal structure and standardized rules for financial reporting. Either working
independently or through regional organizations, an effort should be made to bring
financial reporting more into harmony with international practices and make such
information an intrinsic part of investment decision-making.
Citation
A Research Project Submitted In Partial Fulfilment Of The Requirements For The Award Of The Degree Of Master Of Business Administration (MBA), School Of Business, University Of Nairobi. (2013).Publisher
University of Nairobi School of Business