Effects Of Foreign Direct Investment On Agricultural...

ABSTRACT This research investigates and empirically examines the effects of Foreign Direct Investment (FDI) on agricultural output and economic growth in Kenya. The methodology involves estimating an economic growth model using panel data of the period from 1990 to 2013. By applying the OLS method, the results indicate that FDIhas a negative effect on the economy overall, while combining with other factors such as labour, GCF and exports. However, on its own, FDI’s prove to have a positive but insignificant effect on GDP. CHAPTER ONE Introduction Statement Claims that the Foreign Direct Investment in Agriculture in Kenya have brought about many benefits as opposed to the vices are wrong. In his book, Multinational Corporations in Political Economy of Kenya, Langdon investigates multinational Corporations performances in Kenya in the mid 1970’s and concluded that their impact was overwhelmingly negative to the economy of Kenya. He argued that the MNC’s in Kenya after independence to date became ‘powerful instruments’ for profit making, a great deal of which profit was repatriated. They produced fewer spread effects in form of employment or linkage than local entrepreneurs would spur. 1.0 Introduction Agriculture is the beating hub of the Kenyan economy. The agriculture sector is the single largest sector of the economy accounting for about one quarter of GDP. About 18 per cent of growth in GDP in 2012 was from the sector, up from 7.5 per cent recorded in 2011. 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