Masters Degree Dissertations

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Browsing Masters Degree Dissertations by Author "Okello, Patrick"

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    Foreign direct investment inflows-economic growth nexus among the COMESA member states
    (Kyambogo University (Unpublished work), 2024-10) Okello, Patrick
    This dissertation examines the nexus between foreign direct investment inflows and economic growth among COMESA member states, while controlling for the effects of gross capital formation, domestic credit to the private sector, exports and inflation. Analysis was focused on two fronts: the causality relationship and cause-effect relationship. Panel data for the period 1994-2019 was utilized to examine the underlying relationships. The study employed the panel vector auto regression with exogenous regressors (PVARX) and the first difference generalized method of moments (D-GMM) analytical techniques to achieve the study objectives. Results from the study revealed a uni-directional causality, with causality running from economic growth to FDI net inflows. However, results indicated that FDI and gross capital formation had a joint causality on economic growth among the COMESA member states. The regression estimates from D-GMM estimation showed that the partial slope coefficient on the FDI variable was positive but statistical insignificant at 5 percent testing level, which suggested that FDI net inflows did not have a significant effect on economic growth among the COMESA member states. Among the control variables included in panel regression model, results showed that gross capital formation and domestic credit to the private sector had a significant positive causal effect on economic growth among the COMESA member states while the inflation variable had a negative but insignificant effect on economic growth among the COMESA member states. This study has been unique of its kind by employing PVARX and D-GMM analytical methods to uncover causality and cause-effect relationship between economic growth and FDI in the COMESA member states. Results suggest that FDI alone does not have ability to predict economic prosperity among the COMESA member states but FDI and gross capital formation can jointly help to predict economic growth in the COMESA member states. Key words: Causality, GDP, FDI, PVARX, D-GMM, COMESA.