Effects Of Foreign Direct Investment On Agricultural Output And Economic Growth Essay

The main industry is the agricultural sector which completely depends on the climate. There are strong linkages between poverty and environmental degradation, particularly poor water management, soil erosion, declining soil fertility and land degradation. In addition, the effects of climate change are undermining an already fragile resource base and have contributed to declining agricultural yields over the past decades. In recent years, drought has become a perennial problem in parts of Kenya. Episodes in 2009 and 2011 generated food emergencies, while flooding in 2010 affected parts of the country severely.

5. The modern international trade theories explain trade from a firm, rather than a country, perspective.

This paper will analyze the affects that are harming the agricultural system in Kenya, Africa. There are numerous problems that could be taken into account for the lack of production in Kenya 's agricultural system. This paper will highlight four main issues that harm the development of Kenya 's agricultural system. These four main problems are leading factors that destroys the growth of crops and the success of harvest seasons. The first main point that will be analyzed in this paper is climate change which is the leading cause of bad crop seasons in Kenya. The next variable to be analyzed is the lack of infrastructure in Kenya’s geographical makeup. The third variable to be analyzed on the failure of Kenya 's agricultural system is pesticides and disease. The finally elements that leads to the harm on crop production in Kenya is soil nutrient deterioration. These are just a few of the cause that harms the development of Kenya Africa’s agricultural system.

Foreign direct investment by multinational corporations is the action of obtaining controlling equity share of a firm in a foreign country. There has been many discussions about the role of FDI in affecting a country’s unemployment rate and economic growth. Of which many believed

Miao Wang (2010), “Foreign direct investment and domestic investment in the host country: evidence from panel study”, Applied Economics, 42, pp. 3711-3721 [Online] Available at: http://ehis.ebscohost.com.ezproxy.liv.ac.uk/eds/detail?vid=4&hid=3&sid=d270c6f2-d2fd-483c-8224-564af5d207e7%40sessionmgr110&bdata=JnNpdGU9ZWRzLWxpdmUmc2NvcGU9c2l0ZQ%3d%3d# (Accessed on 13 November 2012)

Agriculture is a major industry in Ethiopia's economy. It accounts for 80% of employment, 50% of gross domestic product and 84% of Ethiopia's Exports. The main agricultural products that get

After opening of the trade barriers in 1991, the foreign investment inflows have increased enormously. Foreign capital, which actually plays an important role in increasing productivity of labor and accumulation of foreign reserve in developing countries to meet the current account deficit , is consist of foreign direct investment (FDI) and foreign portfolio investment(FPI). Both have worked as an instrument of global economic integration and stimulation. Apart of providing access to the foreign capital FDI also offers modern era technology, tools of creativity, desired skill sets and other complementary skills. In addition of producing additional economic activity and generating employment, foreign investment facilitates in flow of sophisticated technology.

Foreign direct investment plays a critical role in financing the development of emerging economies. Foreign direct investment benefits countries through a transfer of resources in the form of capital, technology, management of resources, creation of work opportunities, and a positive impact on the country’s balance sheet, typically through an increase in export volumes. These benefits are essential for sustainable growth and development of a country, especially for developing countries. Despite the important role that foreign direct investment plays in helping to achieve the Sustainable Development Goals, many developing countries face challenges in accessing this source.

Kenya is located in East Africa and based on the results of the national census conducted in 2009, Kenya has a total population of approximately 40 million citizens with at least 47 ethnic communities. The native language is Swahili but, both Swahili and English are spoken widely throughout the country. As a democratic state, Kenya is under the rule of a de jure government headed by President Uhuru Kenyatta. Regarding its economic status, Kenya 's economy is one of the most developed in Africa and the largest economy in East Africa. Reports by the World Bank show that as of 2015, Kenya’s Gross Domestic Product (GDP)) was worth 63.40 billion U.S dollars with a GDP a per capital equivalent to 9% of the World’s average. When dealing with labor and

The focus of this research is examining the affects of foreign direct investment on economic growth. Then the research reached this question: How Does Foreign Direct Investment Effects On Host Country’s GDP (Economic Growth)? Firstly, research starting with discussing the potential of FDI to affect host country’s economic growth and argues that two important objectes for FDI affects on economic growth, inflows of physical capital and technology spillovers, and according to research the technology spillovers have the stronger effect to enhance economic growth in the host country. Using cross section analysis with the range of ten years the empirical part of the paper reached a conclusion that FDI inflows improve economic growth

There is a long standing belief that foreign direct investment (FDI) inflows help the countries to have the opportunity to make further improvements on their economies. In recent decade, this belief strengthened by the fact that faster growing economies tend to attract more FDIs. Even if the direction of causality between FDI and growth is not absolute yet, positive impacts of FDI such as new technology, know-how or creating employment are enough attractive for policymakers. Consequently, investigating factors that pull FDI into country became a crucial topic in the literature.

By using monthly time series data, we found that Foreign Direct Investment (FDI) is positively affecting the economic growth direct contribution, while Foreign Institutional Investment (FII) is negatively affecting the growth alb its, in a small way and make a preliminary attempt to test whether the international capital flows has positive impact on financial markets and economic growth. The empirical analysis using the time series data between April 1995 to December 2004 shows that FDI plays unambiguous role in contributing to economic growth.

Foreign Direct Investment (FDI) is one of the biggest tools for international economic integrations. Firms view overseas expansion as a necessary step to achieve a more effective access in the markets where they presently have low representation as stated by Tyu T. and Zhang M. M. (2007). In order to take advantage of the aggregate economies offered by the blooming innovative environment in that particular region, firms of course will invest heavily in an advantaged location to compete with other countries. According to Changwatchai P. (2010), FDI has become more important for the economic growth and development of many countries. FDI can deliver capital, a means to pursue global strategic objectives, and a means to access technology and skills to the host country. Attracting FDI is an important issue of concern to many developing nations.

Historically, Kenyan government, in order to foster the development of domestic firms, expelled foreign investment, and those policies further worsen the situation. Although the exploitation from multinational corporations lessened, the economy, as a whole, suffers by, for example, lost job opportunities provided by foreign companies. Kinyua (2002) stated that the poor infrastructure condition in Kenya slowed the progress of developing in agricultural sector; it also caused an impediment of labours moving from rural- to urban-side. Istrate, Tsvetovat, and Acharya (2007) mentioned that the secondary

Abstract: This study examines empirically the relationship between FDI and economic growth using heterogeneous panel for the period 1983-2008. The empirical findings of Larsson panel co-integration show that FDI and economic growth are cointegrated. FMOLS results reveal that FDI and economic growth are positively related to each other. The results of panel homogeneous causality hypothesis show the existence of bi-directional causality between FDI and economic growth while the results of panel homogeneous non-causality hypothesis confirm the existence of unidirectional causality running from FDI to economic growth in selected panel. The results of heterogeneous causality hypothesis show the existence of bi-directional causality between FDI and economic growth only in case of Malaysia. The existence of uni-directional causality running from FDI to economic growth is observed in cases of Nepal, Singapore, Japan and Thailand