Investment In Kenya Research Articles

Effect of Venture Capital Financing on Investment in Kenya

Purpose: The objective of this paper is to determine the effect of venture capital financing on investment in Kenya. 
 Methodology: To achieve the objective of the study, venture capital was disaggregated into two variables, namely, the number of firms financed and the total amount of financing. Other variables, such as interest rate and GDP per capita were also included in the analysis to act as control variables. The study used 10 years of data spanning from 2009 to 2018. A regression analysis was done in order to analyze the data. 
 Results: The study established that there is a positive correlation between the number of firms financed and the aggregate investment in Kenya. The study observed that the total amount of financing has a positive correlation with aggregate investment. 
 Implications: The study concludes that venture capital financing has a positive effect on aggregate investment levels in Kenya. The study recommends that the Kenyan government should come up with ways of financing small and medium enterprises, which will boost their productive capacities leading to more investment in the country and more generation of income.

Influence of Macroeconomic Factors on Performance of Real Estate Investment Trusts in Kenya

The need for effective management of REITS has gained attention globally. REITs were initially created by the United States Congress in the 1960’s as a vehicle through which small investors could gain access to large scale, income producing real estate properties. However, REITs has suffered from a lack of popularity due to other tax-sheltered real estate investments, such as limited partnerships. In Kenya, despite a rather slow start, in 2017, the only listed REIT in Kenya saw its price decline by 13.4 per cent. REITS has not been managed effectively such that their performance has been greatly affected. The present study therefore sought to investigate influence of macroeconomic factors on performance of real estate investment trusts in Kenya . The specific objectives were; to determine the influence of Exchange rate, to establish the influence of Interest Rate, influence of Inflation and to investigate the influence of economic growth on performance of Real Estate Investment Trusts (REITs)Kenya. This study was grounded on modern portfolio theory, pecking order theory, arbitrage pricing theory and purchasing power parity (PPP). The study used descriptive survey research. The findings show that that Exchange rate has a significant influence on performance of Real Estate Investment Trusts in Kenya ( β =0.499; p<0.05) . Interest Rate has no significant influence on performance of Real Estate Investment Trusts (REITs) in Kenya ( β =0.519; p>0.05) . Inflation rate has a significant influence on performance of Real Estate Investment Trusts (REITs) in Kenya ( β =0 .079 ; p<0.05) . Economic growth has no significant influence on performance of Real Estate Investment Trusts (REITs) in Kenya ( β =0 .040 ; p>0.05). The finding concludes that Exchange rate has an influence on performance of Real Estate Investment in Kenya. Therefore, an increase in exchange rate affects the stock prices of REITS thus affecting their performance. Interest Rate has a significant influence on performance of Real Estate Investment Trusts hence affecting the volatility of REIT property market. Inflation rate has a significant influence on performance of Real Estate Investment Trusts (REITs) in Kenya. Finally, e conomic growth has a significant influence on performance of Real Estate Investment Trusts (REITs) in Kenya. Therefore, economic growth develops investors financial base to invest more in REITS. The study recommends that factors such as inflation rate should be addressed as they affect the exchange rate which in turn affects the performance of Real Estate Investment Trusts (REITs). Secondly, interest rate should be harnessed by the commercial banks in order to encourage investors in venturing Real Estate Investment Trusts. This will promote performance of REITS. Thirdly, a ll sectors of Economy should be stimulated to growth in order to attract more investment in REITs.

The Effect of Public Capital on Private Investment in Kenya

The Effect of Public Capital on Private Investment in Kenya

Migration, remittances and human capital investment in Kenya

AbstractThis paper investigates the relationship between international migration, remittances, and human capital investment in Kenya. We use household‐level data from the 2009 Kenya Migration Household Survey (which was part of the Africa Migration Project) to test our hypothesis and uncover a positive and significant relationship between the amount of international remittances a household receives and the amount of expenditures allocated to education (for all levels of education). We consider various robustness checks and find that our results hold up to various specifications, including an instrumental variable approach.

Economic analysis of spillover effects of an integrated pest management (IPM) strategy for suppression of mango fruit fly in Kenya

The International Centre of Insect Physiology and Ecology (icipe) recently developed and disseminated an integrated pest management (IPM) strategy to suppress the invasive oriental fruit fly species Bactrocera dorsalis in mango-growing communities in Africa. While the economic benefits of the strategy in mango production have been established, the cross-commodity benefits have not been assessed, despite evidence of the target fruit fly species’ effect on a wide range of cultivated host crops. Using propensity score matching, we analysed data on 371 households obtained from a survey of an icipe project in Kenya and sought to determine whether applying an IPM strategy for fruit fly had a spillover effect on gross margins. We focused on four alternative cultivated hosts of B. dorsalis, namely avocado, pawpaw, citrus and banana. We found positive and significant cross-commodity spillover effects in respect of employing the IPM strategy for fruit fly targeting pawpaw and citrus, suggesting a wide scope for IPM investment in Kenya and other fruit-producing regions in sub-Saharan Africa.

Effects of Macroeconomic Factors on Foreign Direct Investment in Kenya

This study examined the effects of macroeconomic factors on foreign direct investment in Kenya (FDI). The study used four macroeconomic variables namely foreign exchange rates, tax rates, inflation rates, interest rates and balance of payment for the period 1970 to 2010. The study used a multiple linear regression analysis with the FDI inflows as the dependent variable and the macroeconomic factors as the independent variables. The study found a positive relationship between FDI and interest rates as well as balance of payments while inflation and tax rate had negative relationship with FDI. The study recommended that the government should promote a stable macroeconomic environment in the country to enhance FDI. Keywords: Interest rate, Inflation rate, Exchange rate, Tax rate, Balance of Payments, Foreign Direct Investment. DOI : 10.7176/EJBM/11-3-06

Real Effective Exchange Rate Volatility and Its Impact on Foreign Direct Investment in Kenya

Real Effective Exchange Rate Volatility and Its Impact on Foreign Direct Investment in Kenya

Migration, Remittances and Human Capital Investment in Kenya

This paper investigates the relationship between international migration, remittances and human capital investment in Kenya. We use household level data from the 2009 Kenya Migration Household Survey (produced by the Africa Migration Project) to test our hypothesis and uncover a positive and significant relationship between the amount of international remittances a household receives and the amount of expenditures allocated to education (for all levels of education). We consider various robustness checks and find that our results hold up to various specifications, including an instrumental variable approach.

Effects of Infrastructure Development on Foreign Direct Investment in Kenya

Kenya’s foreign direct investment (FDI) inflows as a percentage of GDP have been increasing negligibly over the last 4 years, increasing from 0.4 per cent in 2010 to 0.9 per cent in 2013. And yet evidence shows that quality infrastructure lowers the cost of doing business and thus attracts FDI. Kenya has visible signs of infrastructure inadequacy and inefficiencies despite the fact that since the year 2000, there has been increased budgetary allocation to the infrastructure sector. This study, therefore, sought to determine the effects of transport, energy, communication and water and waste infrastructure development on FDI inflows in Kenya. The study used annual time series data sourced from Central Bank of Kenya, World Bank and the United Nations Conference on Trade and Development (UNCTAD). Using multiple regression analysis, it was established that improved transport infrastructure, communication infrastructure, water and waste infrastructure, exchange rate, economic growth and trade openness are important determinants of FDI inflows into Kenya. Hence, for Kenya to attract more FDI, continued infrastructural development is key since quality infrastructure affords investors a conducive investment climate in which to operate.

Impact of Selected Macro Economic Variables on Foreign Direct Investment in Kenya

Foreign direct investment is one of the major sources of external finance for developing countries like Kenya that have a limited amount of capital. Foreign flows into the country so far have been increasing as compared to the previous year’s revealing Kenya potential as a business hub for multinational companies to invest in. However, the inability to retain FDI flows into the country has become a major problem and understanding the factors driving FDI inflows into a country and their impact on a country’s economic development is of importance. The main objective was to find out the impact of exchange rate, GDP and inflation on FDI in Kenya. Foreign direct investment as a percentage of GDP was the dependent variable while the independent variables were exchange rate, GDP and Inflation rate. The study examined data for 10 years from 2005-2014 for Kenya. To find out the perception of people towards FDI in Kenya primary data was collected from a sample of 271 people. A linear regression analysis was used to determine the relationship between exchange rate, GDP, inflation rate and FDI inflows. Exchange rate, GDP and Inflation rate were found to have a negative insignificant effect on FDI inflows. The study also found out that people in Kenya perceive FDIs as market seeking investments that is they will invest if there is availability of market for the goods and services produced. The study recommends that Policies in relation to formation of regional treaties between Kenya and neighboring countries with an aim of encouraging foreign investment should be made. Security should also be maintained within and around the country and political stability is also crucial in attracting and retaining FDIs. In addition the government should increase its fight against corruption in Kenya so as to increase the foreign investor’s confidence in investing in our country.

Risk Control versus Risk Management in the Context of an Active Management: The Emerging Market Alternative

The regulatory environment to which financial institutions and specially banks are subjected has been evolving over the years. However, global financial sector stability has remained elusive with the global economy experiencing more financial crises in the past decade than the preceding decades. These financial tremors have had their epicenters in the advanced economies triggered by events in the banking industry. Further, economic growth in the developed economies has been very low and sometimes negative with close to 50 percent of the stock market value having been wiped out by the 2007/2008 global financial crisis. Against a backdrop of improved bank supervision and regulation courtesy of the Basel frameworks the Eurozone economies are reeling in recession. On the other hand the emerging and transitional economies have for the past close to a decade and a half showed resilient and outstanding performance with less stringent supervisory regimes enabling commercial banks to earn high profits. The profitability of the industry bolsters investment and recurrent expenditure all of which have the effect of fueling inflation and volatile exchange rates which accelerate economic growth, high interest and lending rates as well as market liquidity. These conditions provide opportunities for arbitrage trading that gives above average returns on investment as exemplified by the trend analysis. The high economic growth comes with attendant high inflation, lending rates and returns on government securities. The study set out to determine whether the high return environment within developing economies provides arbitrage investment opportunities and influences foreign investment by attracting foreign investment participation in government securities trading. The specific objectives were to demonstrate the adverse effects including the systemic vulnerabilities imposed by excess competition occasioned by thorough regulation and to empirically determine whether higher high exchange, lending, Tbill and Tbond rates attract foreign investment to developing economies with focus on Kenyan government securities. The study adopted secondary time series data analysis to establish whether or not lending rates, USD exchange rates, Tbond and Tbill rates affect foreign investment in government securities. The time series data analysis confirmed that in the long run, Tbond, USD exchange and lending rates all significantly influence the foreign investment in Kenya vide the Treasury bonds avenue. Based on these findings we conclude that emerging and transitional economies offer a perfect arbitrage investment opportunity for low return advanced economies.

Jotun Paints announces significant Kenyan Shilling 250 M investment in Kenya

Jotun Paints announces significant Kenyan Shilling 250 M investment in Kenya

FDI determinants: Kenya and Malaysia compared

This paper examines in a comparative context the determinants of foreign direct investment in Kenya and Malaysia as well as its impact on economic growth in order to inform policy debates. Kenya in the recent past has committed itself to emulating the development experiences of Malaysia in order to inform its industrialization efforts. The study uses time series data for the period 1960–2009, which is analyzed in a vector autoregressive model. The results do provide support for the role of FDI in Malaysia's industrial success but not for growth in Kenya. From a policy view point, Malaysia's success in attracting huge FDI inflows compared to Kenya during this period is due to differences in macroeconomic stabilization, and trade policies as well as infrastructure and institutional factors.

The Impact of Terrorism on Foreign Direct Investment in Kenya

This paper assessed the relationship between terrorism and foreign direct investment in Kenya. Secondary data on the Terrorism attacks and FDI from 2010 to 2012 was used for the study. Multiple regression model was used to test of the relationship between the study variables. By applying the model, the study found that terrorism negatively affects FDI in Kenya. It was concluded that Terrorism activities negatively affect the FDI in Kenya. Terrorism activities decrease the foreign investor confidence, which decrease the FDI. The Null hypothesis that there is no relationship between terrorism and FDI was thus rejected.

Asian tigers, African lions: comparing the development performance of Southeast Asia and Africa

Contents List of figures and tables Part I Introduction 1. Tracking Development: Design, process, organization, and results Bernard Berendsen & Roel van der Veen 2. Diverging paths: Explanations and implications David Henley & Jan Kees van Donge 3. Cross-regional comparisons in development: Questions, approaches, and challenges Peter Lewis 4. Comparing the agricultural performance of Africa and Southeast Asia over the last fifty years Ton Dietz Part II Comparing Indonesia and Nigeria 5. Technocracy and the institutionalization of economic development in Indonesia and Nigeria (1967-1990) Riwanto Tirtosudarmo 6. Elites and exchange rate policy in Indonesia and Nigeria Ahmad Helmy Fuady 7. Population programmes and their implications for poverty reduction in Indonesia and Nigeria, 1966-1999 Akinyinka Akinyoade 8. The impact of corruption on economic development: Comparing the experience of Nigeria and Indonesia (1967-1998) David U. Enweremadu Part III Comparing Malaysia and Kenya 9. Agricultural and rural development in Malaysia and Kenya and the politics of policy Joseph Fernando 10. The politics of policy for poverty reduction: Comparing Malaysia with Kenya Othieno Nyanjom 11. A comparison of the industrial policies and outcomes in Kenya and Malaysia Bethuel K. Kinuthia & Ton Dietz 12. Foreign direct investment in Kenya and Malaysia Bethuel K. Kinuthia & Mansoob Murshed Part IV Comparing Vietnam and Tanzania 13. Differential supply responses to liberalization, and resultant poverty alleviation in Vietnam and Tanzania Jan Kees van Donge 14. The variation in output and marketing of cashew in Tanzania and Vietnam Blandina Kilama 15. The textile industry in Vietnam and Tanzania Jamal Msami Part V Comparing Cambodia and Uganda 16. Agricultural policies and performance in an African and Asian poor agrarian society: Uganda and Cambodia compared Andre Leliveld & Han ten Brummelhuis 17. Rhetoric and reality of rural road building: Two tales from Cambodia and Uganda Kheang Un 18. (Re-)building educational systems as a contribution to growth and well-being: Comparing Uganda and Cambodia Leang Un Part VI Some afterthoughts 19. Policy and governance in Africa's economic transformation: Firm findings and remaining questions David Booth List of authors

Globalization and the Changing Networks of Food Supply: The Importation of Fresh Horticultural Produce from Kenya into the UK

Set within the context of the global food supply system, this paper examines the growing trade in fresh horticultural produce between Kenya and the UK. The links between UK retailers and Kenyan producers are investigated using the concept of the marketing chain. Two major chains are identified ‐ wholesale and supermarket – and, whilst having no direct investment in Kenya, it is the supermarkets who control production there, through intermediaries who ensure that standards of quality and presentation are met. Importers play a crucial role in facilitating this trade, acting as a vital link between farmers and exporters in Kenya and supermarkets in the UK. The need for quality and traceability dictates that contractual arrangements are made predominantly with large‐scale farms using productivist farming methods. The irony is that it is post‐productivist demands by ‘new consumers’ in the UK that are encouraging these productivist horticultural systems in Kenya.

Determinants of Investment in Kenya and Côte d'Ivoire

An eclectic model of investment is constructed for Kenya and Cote d'Ivoire, using a two-step Engle-Granger approach to deal with non-stationary variables. Both monetary and financial integration are found to play a role in the determination of investment. Copyright 1993 by Oxford University Press.