School of Business
Permanent URI for this collectionhttp://192.168.8.146:4000/handle/123456789/16
Browse
6 results
Search Results
Item Relationship Between the Determinants of Foreign Direct Investment and Effects on Economic Growth in Kenya(KCA University, 2016) Gitari, Peris W.Foreign direct investment (FDI) plays important role in achieving rapid economic growth through bringing the latest technology and management know-how and bridging the gap between domestic savings and investment. Kenya has recently experienced a hit in foreign direct investment following a period of substantial decline of FDI inflows. The net FDI inflows in Kenya has been declining and also highly volatile despite friendly economic environment and improved polices implement to so as to attract and retain FDI and accelerate her economic growth and development. The study aims at investigating the relationship between the determinants of foreign direct investment and the economic growth of selected sectors in Kenya. The target population is the seventeen activities as listed in the Kenya facts and figures (KNBS, 2014). Theories applied in the study included; Market Imperfection Theory; Internalization Theory; Eclectic Paradigm and Solow Type Growth Theory. Descriptive research design was used while data collected covered a period of five (5) years from 2011 to 2015. Descriptive research design is adopted and census used. Secondary data was obtained from the Central bank of Kenya publications, the Kenya National bureau of statistics publications, International Monetary Fund (World Economic Outlook Database) publication and the World Bank (WDI. The study used panel data model which included dependent variable as economic growth while independent variables was market size, economic openness and cost of labour. Diagnostic tests included panel unit root test, multicollinearity, serial correlation, Heteroscedasctity and cross-sectional dependence test and due to violence of CLRM, Hausman specification test used to evaluate the aptness of either the fixed model or random model to be used was not done instead the model was fitted using Robust Standard Errors. The Ms-Excel and STATA was used to analyze the data.Item Relationship Between Financial Deepening And Economic growth In Kenya(KCA University, 2016) Ng'ang'a, Laura.Financial deepening has been found to promote economic growth by its ability to mobilize more investments thereby making financial resources readily available, and hence raises productivity. They are found important as they play intermediation role, by channeling funds from surplus units (savers) to deficit units (investors). The aim of this study investigated the relationship between financial deepening and economic growth from 1994 to 2015. The objectives of the study were to determine the relationship between commercial banks liquid liabilities and the economic growth in Kenya, establish the relationship between credit to the private sector by commercial banks and the economic growth in Kenya, establish the relationship between commercial and central banks‟ asset ratio and the economic growth in Kenya, determine the relationship between commercial bank deposits and the growth of economy in Kenya and to determine the causal linkage between financial deepening and economic growth in Kenya. The research design was a causal and longitudinal research designs. The target population was all the 44 commercial banks in Kenya excluding bank under receivership. Due to the manageability of the population, the researcher did a census study. The study used secondary data collected from published documents of the Kenya Bureau of Statistics and Central Bank of Kenya. The study employed cointegration test to determine the long run relationship between the variables and the study established that there was cointegrating relationship between the financial deepening indicators and economic growth, meaning there was a significant relationship between the financial deepening on economic growth in the long run. The study concluded that financial deepening propels economic growth because the variables of financial deepening were more significant in explaining economic growth, therefore supporting the supply leading hypothesis. The study recommended that the monetary authorities to bridge the gap existing between lending rate and deposit rate, foster a moderate rise in nominal rates and stabilize inflationary pressures, need to sustain a higher level of macroeconomic stability in Kenya, reduce the high incidence of non performing credits ensure that private sector credits are channeled to the real sector of the economy and the monetary authorities should continue with the policy reforms to consolidate the emerging confidence in the financial systemItem Effects Of Foreign Aid On Economic Growth In Kenya(KCA University, 2020) Thuita, John K.This study focused on the relationship between foreign aid and economic growth in Kenya. The dissertation had three objectives as follows: to establish the impact of emergency aid to economic growth, to examine the effects of concessional loans to economic growth and finally to evaluate the impact of grants to economic growth in Kenya. Extensive literature was reviewed to establish the signifiacnce of the study, highlight knowledge gaps and provide benchmark for comparison of the findings. The study would be invaluable to the various stakeholders such as policy makers and different government agencies by supplying vital information relating to foreign aid that would nurture economic growth in Kenya. The study used secondary annual time series data acquired from World Bank, Central Bank of Kenya and Kenya National Bureau of Statistics. The study sampled a period of 55years from 1963 to 2018 in Kenya. Descriptive research design was used. Time series analysis was be applied to check the relationship among the variables. STATA and MS Excel were used in data analysis. Econometric modelling was used to check the relationship between the variables. Vector Error Correction Model (VECM) was fitted. The results were consequently displayed using charts, tables and percentages. The study concluded that foreign aid had significant effects on economic growth through filling domestic savings and foreign exchange traps. The study on the effects of foreign aid has experienced mixed reactions with various scholars arriving at different conclusions. There are those researchers that are in agreement with notion that foreign aid results in economic growth of a country while others do not. Those who support such conclusions claims that foreign aid helps Least Developed Countries to grow economically and improve human development especially countries with sound political and economic policies. However, scholars who are against feels that aid creates a moral hazard problem whereby the government can spend funds without proper budget policy being sure that the donors will come into rescue in case of any financial difficulty. I recommend that the government should ensure that the loans and aid should be channeled in sectors of economy that would have significant effect on growth. Also, there should be policies and regulation in place to ensure that aid received is not embezzled or misappropriated. This in essence requires policy makers in the government, civil society and oversight bodies such as National Assembly, Auditor General, Ethics and Anti-Corruption Commission among others to be extra vigilant and judicious in ensuring that aid received is used for intended purposes.Item Effect Of Foreign Inflows On The Economic Growth Of East African Member Countries(KCA University, 2020) Ringera, Peninah M.The main objective of this study was to investigate the effect of foreign inflows on economic growth of East African Community countries. Three independent variables including foreign direct investment, personal remittance and external debt were reviewed to evaluate their effect on gross domestic product of EAC countries. The specific objectives for this study were to evaluate the effect of external debt on economic growth of East African Community countries, assess the effect of foreign direct investment on economic growth of East African Community countries and investigate the effect of remittances on economic growth of East African Community countries. Theories applicable to the study such as debt overhang theory, internationalization theory and utility theory were reviewed. To accomplish the study objective, Pooled Ordinary Least Squares model was recommended based on model estimation performed for panel data of three countries using Hausman test and Breasch –Pagan LM tests. The target population sample size was three East African Community member countries that signed into the union in 1993 and they include Kenya, Uganda and Tanzania. A panel data covering a period of 20 years from 1999-2018 was used. Rwanda and Burundi acceded the treaty agreement in July 2007 while South Sudan joined in April 2016. Data was obtained from World Bank’s African Development indicators, reports from bureau of statistics from each of the countries, data from central bank for each of the countries and information published on the website. This study concludes that foreign direct investment has significant impact on gross domestic product of East African Community Countries. Foreign direct investment therefore, is one of the foreign inflows that has an effect on economic growth of East African Community Countries. The results from this study also found the coefficient for remittance was positive but statistically insignificant. The results from this study found that external debt negatively affect the gross domestic product of East African Community countries. More studies would also be recommended to investigate the negative effect on gross domestic product for East African Community countries by external debt. Little or no research has been conducted to investigate the existence of debt overhang or debt crowding out effect specifically in East African Community countries. Further research is recommended as this would give more insights to East African Community countries on how to deal with external debts to avert the negative effect on economic growth and development.Item Role Of International Trade On The Economic Growth In Kenya(KCA University, 2017) Gitau, Peter N.While economies are striving hard to achieve high economic growth, it becomes more important to answer the question of what actually determines their economic growth. International trade has recently been considered as an important determinant of economic growth. The general objective of the study was to examine the role of international trade on economic growth in Kenya. The specific objectives of the study were to establish the role of human capital development, customs duty, foreign direct investment and international trade openness on economic growth in Kenya. Descriptive research design was applied in this study as the study sought to collect data and establish relationships that existed without changing the environment in any way. The study was a case of Kenya. Available data for Kenya 1964 to 2015 was used. The data was collected from World Bank, World Trade Organization, World Customs Organization and Kenya Revenue Authority. The data collected was analyzed using the vector autoregression model. To establish whether the time series relating to international trade cause the time series related to economic growth, the analysis of the data through the model was preceded by tests of unit root and stationarity. Stata statistical package was applied in data analysis. The findings were then presented in figures and tables. The findings established that human capital and international trade openness had significant positive effect on economic growth. Customs duty had significant negative effect on economic growth while FDI had no significant role on economic growth. The results also indicated that human capital development, international trade openness and customs duty granger caused economic growth. FDI did not granger cause economic growth. The study made the following recommendations. First, the country should seek to enhance human capital to ensure that it is competitive in terms of labour productivity in the labour markets. This is expected to make the country more productive and efficient locally as well as making it competitive internationally. Secondly, the country should seek to utilize the customs that are derived from international trade into developing both human and capital infrastructure that is capable to enhance the country’s competitiveness both in the short term as well as in the long term. Third, Kenya should seek to improve the investments climate and business environment in the country to attract mode FDI which can be able to have a significant role on economic growth. Having policies that encourage FDI and marketing the country as a desirable investment destination would be a good starting point. Lastly, the country should continue to be open to international trade but care should be taken to balance the trade so as to ensure that exports rise more than the rise experienced in imports. The country should also have stringent policies on what should be imported so as to protect local industries.Item Relationship Between Electricity Infrastructure Development And Economic Growth In Kenya(KCA University, 2022) Gituura, Rashid K.The major focus of the study was to find out the relationship between electricity infrastructure development and economic growth in Kenya. The study objectives include examining the relationship between the availability of electricity transmission lines, substation capacity, length of transmission lines and how it affects economic growth in Kenya. The market and infrastructure for electricity continue to be crucial for the growth of the economy. The electricity subsector was initially faced with a number of difficulties, including an insufficient supply, poor levels of access, low reliability, bad supply quality, and restricted transmission capacity combined with high network losses. At the time, the grid was 3200 km long. Significant changes have been made in the energy industry, including the creation of businesses with distinct tasks intended to supply the nation with effective, affordable, and sustainable electricity. In the past, Kenya's government used two primary electrical organizations to produce and distribute power. Kenya Power and Lighting Company (KPLC) and Kenya Electricity Generating Company (KENGEN) are the companies that supply electricity to off-grid stations, buy, transmit, and sell it at retail prices to households across the nation. Later on, though, the government stated that KPLC's transmission and distribution operations needed to be completely unbundled. After more consideration, it was agreed to establish a different business that would be entirely controlled by the government and financed by the exchequer to build upcoming more transmission lines. The Kenya Electricity Transmission Company Limited was subsequently established in 2008 as a state business owned entirely by the Kenyan government. To ensure a dependable, sustainable, clean, secure, inexpensive, and high-quality power supply and to encourage power trade, the corporation is putting projects to expand the national grid and connect the regional grid system into one. The length of the 400kV, 220kV, and 132kV transmission network circuits has increased to over 7220.35km, of which 48.3% is held by KETRACO. The economy has clearly grown as a result of the grid development, and this study aims to examine the causal relationship between economic growth and the expansion of the power infrastructure The study time limit was limited to the period between 1970 and 2019. The study was guided by Keynesian theory and Harrod-Domar Growth Model. The study made use of an explanatory survey research design and will employ a secondary research approach. The study was carried out in Kenya with a special focus on its economy. Data were collected using data collection forms from published statistical reports from the Energy Regulatory Commission, the World Bank, and the Kenya National Bureau of Statistics. The study used time-series econometric models to determine the link between electricity infrastructure development and economic growth in Kenya. The Autoregressive Distributed lag (ARDL) approach was used with the aid of STATA statistical software. Data was presented in the form of tables and graphs, followed by brief explanations. The study’s findings demonstrated the convergence of the model in the long run. In the short run, the coefficient of substation capacity is negative and statistically insignificant, as is the transmission line. The study recommends that reform be undertaken in the energy market structure, especially infrastructure development while creating industry-specific criteria intended to increase the security and reliability of the electrical infrastructure. The study also shows that Kenya is becoming more interested in renewable microsystems, which makes the grid infrastructure redundant.