The Impact of Foreign Direct Investment on the Kenyan Economy

Abstract

The researcher carried out a study which sought to analyze the impact of foreign direct investment on diverse economies in various countries of the world. The study reviewed a total of twenty journal papers obtained from credible peer review journals. Foreign Direct Investment (the independent variable) was measured in log form to enhance accuracy and the economy (the dependent variable) was measured by the gross domestic product, inflation rate, the balance of payment and poverty reduction. The author agreed that foreign direct investment affect host country’s economic growth through physical capital accumulation, technology spillovers, creation of employment opportunities and enhancing productivity by bringing competition to the economy through skills and knowledge transfer and there is an indirect reduction of poverty. The review noted that no recent research has been done on the trends, determinants and pattern of foreign direct investment in Kenya and published in a credible peer reviewed journal. This study therefore recommends that a study should be done on the same to fill this glaring gap.