AMJD Volume. 12, Issue 3 (2023)

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Contributor(s)

Ssentamu Ismail, Ukaidi Chris U. A & Mutasa Felician
 

Keywords

Foreign Direct Investments Market Size Domestic Capital Formation Country Risk Human Capital Infrastructural Development Error Correction Model and Uganda.
 

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Foreign direct investment inflow and its determinants in Uganda from 1996 to 2022

Abstract: Foreign Direct Investments (FDIs) World-wide have been determined by a number of factors which include; Market Size, Quality of Labour Force, FDIs Regulations, Fiscal Policies, Government Expenditure, Political, Social and Economic Stability of the host country among others. This study examines the relationship between FDIs as a dependent variable and its determinants (Market Size, Human Capital, Country Risk, Domestic Capital Formation and Infrastructural Development) as independent variables in Uganda. Time Series Annual data have been used for the period between 1996 and 2022. The study used the Correlation Analysis and Error Correction Model (ECM) in analyzing both short- and long-term impact of one time series on another. The outcome indicated a significantly positive connection between Market Size, Domestic Capital Formation, Human Capital and Infrastructural Development and FDIs inflows in Uganda. But the relationship between Country Risk and FDIs is negative. The study suggests the improvement in the Quality of Labour Skills, Infrastructure Development and providing a favourable investment climate that can encourage FDIs.
 
 
 

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