Foreign Direct Investment and Economic Growth in Ethiopia.pdf

1、By fining the gaps between domestic savings and investment,and by bringing the latest technology and management know-how from developed countries,FDI can play an important role in achieving rapid economic growth for deve

2、loping country.Using a time series data from 1980-2006,this study attempts to investigate the impact of foreign direct investment(FDI)on Ethiopian economy.To achieve its objective,the study uses both descriptive and empi

3、rical analysis.The study also gives attention to the theoretical explanations of FDI,as well as FDI policy regimes in the country during the study periodFDI performance in Ethiopia is generally very low especially before

4、 economic reform.However,after economic reform and trade liberalization,FDI flows to the country have been improved.Indicating that trade liberalization and openness encouraged foreign investment.The empirical finding of

5、 this study shows that FDI and economic growth are positively related.but the result does not show strong evidence on the statistically significance of FDI on GDP growth The direction of causality is more of from economi

6、c growth to FDI than the reverse On attempt to fred the effect of FDI on domestic investment,the result does not find any significant relationship between these investments I.e.at least there is no crowding-out effect of

7、 foreign firms on local firms and domestic investment remain to be source of capital formation.My finding also shows that,economic growth,trade liberalization and export orientation(openness)are the key determinants of F

8、DI flows to Ethiopia Where as,the existence of poor infrastructure,and low level of human capital have a negative impact on the performance of foreign investment in the country.This suggests that,government should make e