Global Factors Influencing Trade and Foreign Direct Investment Patterns, a Survey of Chinese Multinational Corporations in Kenya
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Date
2016-11Author
Chepkemei, Caroline
Type
ThesisLanguage
enMetadata
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The objective of the study was to establish global factors influencing trade and foreign direct investment patterns; A survey of China MNCs in Kenya. The relevant theories in support of the study are; Gravity theory; Theory of absolute advantage; Theory of comparative advantage and Hecksher – Ohlin Theory. The essential Conditions for Globalization encompass freedom in reference to absence of government regulations and restrictions on sourcing and financing from foreign investments, that is the essence of economic liberalization; facilities including infrastructural facilities to enable the firm operate effectively; government support, favorable policy and procedural reforms, development of common facilities, Research and Development (R&D), financial and market reforms; resources include R&D, finance, managerial expertise company and branding; competitiveness arising from low cost factors, costs, product differentiation, technological superiority, after sale service, marketing capabilities, among others; finally the issue of global orientation gains from trade are varied in nature. The study used descriptive research to analyze data which was conducted on 28 multinational corporations in Kenya. A total of 84 questionnaires were distributed. 60 questionnaires were successfully filled and returned. The findings indicate that most of these respondents occupied senior management positions, a few were directors of the host company. The study indicated that over 65% of the employee had worked with the firm for more than 15 years while 35% had worked between 1 year and 10 years. From the analysis, good level of education standards were registered with 25% university level, 40% postgraduate level and 35% doctorate level. The results indicated that 42% of firms have been in operation for up to ten years of operation; 33% have been in operation for over ten years; and 25% of these firms have been in operation for 20 years. It emerged that 35% of these firms are in engineering related fields, 40% of these are in construction industry, the rest of 25% are divided among the enterprise general business. The factors which have greatest influence are government policies, high cost, trade barriers and competition. The least influential factors were supply problems and resistance to change. The analysis indicated the most popular modes of entry for the Kenya’s – China multinationals. Popular mode of entry included joint ventures; franchising, wholly owned subsidiary and licensing. Management contract and turnkey projects are the least popular modes of entry to foreign markets. The outcome of the analysis revealed particular patterns of factors which have influenced foreign investment patterns. Most noted were desire to expand own markets, government policies and regulations and competitive pressures globally. The study also noted the various constraints towards globalization practices. They included poor infrastructure, negative foreign government policies and regulatory framework. The study also indicated a very encouraging pattern of investment between Kenya and China through the operations of these multinational firms. The firms have greatly contributed to Kenya economic development agenda
Publisher
University of Nairobi
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Attribution-NonCommercial-NoDerivs 3.0 United StatesUsage Rights
http://creativecommons.org/licenses/by-nc-nd/3.0/us/Collections
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