Inward Foreign Direct Investments and Transfer of Technology by Information Technology Multinational Corporations in Kenya

Abstract

The purpose of this study was to determine the effect of inward foreign direct investments by information technology multinational corporations in Kenya & investigate on the transfer of technology by these corporations. The study adopted cross sectional and descriptive survey methods aimed at establishing the inward foreign direct investments and transfer of technology by information technology multinational corporations in Kenya. The study found found that the use of tax breaks by the government directly affects foreign direct investments into the country. This study also established that the determinants of foreign direct investments into Kenya are Market in Kenya and neighboring countries, political stability, absence of maximum retail price, stable and growing economy, human resource availability and strategic infrastructure. It is noteworthy also that the impediments to foreign direct investments into Kenya include Delays in licenses and work permits, corruption, political instability, and unreliable infrastructure. The study recommends that the Ministry of Trade exercises the use of tax breaks, and the use of import duty concessions to attract the desired level of foreign direct investments into the country in the IT industry. Moreover, the same ministry should review the licensing and work permits procedures (which were tenned as impediments) if it is to attract FDI in IT in Kenya.