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Determinants of Foreign Direct Investment in Malawi
This study examines empirically the determinants of Foreign Direct Investment in Malawi, by employing annual data that covered the period 1970-2016. The study used a dynamic model, the Autoregressive Distributed Lag bounds-testing approach to co-integration and error correction model, to explore...
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| Other Authors: | |
| Format: | Thesis |
| Language: | Eng |
| Published: |
Graduate School of Business (GSB)
2019
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| _version_ | 1867613189981601792 |
|---|---|
| access_status_str | Open Access |
| author | Chimbalu, Mkondana |
| author2 | Gumede, Lungelo |
| author_browse | Chimbalu, Mkondana Gumede, Lungelo |
| author_facet | Gumede, Lungelo Chimbalu, Mkondana |
| author_sort | Chimbalu, Mkondana |
| collection | Thesis |
| description | This study examines empirically the determinants of Foreign Direct Investment in Malawi, by
employing annual data that covered the period 1970-2016. The study used a dynamic model, the
Autoregressive Distributed Lag bounds-testing approach to co-integration and error correction
model, to explore these determinants. The study found that a long run relationship between Foreign
Direct Investment and the selected determinants: market size, infrastructure, human capital, broad
money, real exchange rate, population growth, government consumption, and inflation. The study
further found that the determinants that were significantly associated with attracting Foreign Direct
Investment in Malawi included infrastructure, broad money and government consumption.
Specifically, the study results found that government consumption is negatively and significantly
associated with Foreign Direct Investment both in the short and long run; infrastructure is
positively and significantly associated with Foreign Direct Investment in the long run; broad money
is positively and significantly associated with Foreign Direct Investment in the long run; and no
significant relationship was found between market size, human capital, real exchange rate,
population growth, and inflation both in the short and long run. These results have important policy
implications for Malawi. These include the need for Malawian authorities to focus on strategies
that create incentives to increase the level of physical infrastructure in the country; implementing
monetary policies, fiscal incentives and subsidies that promote financial development; as well as
promoting FDI-friendly government policies that minimise the impact of distortionary fiscal
policies such as distortionary taxation and deregulation. |
| format | Thesis |
| id | oai:open.uct.ac.za:11427/30575 |
| institution | University of Cape Town (South Africa) |
| language | Eng |
| last_indexed | 2026-06-10T12:32:12.136Z |
| license_str | Not specified — see source repository |
| provenance_str_mv | Harvested via OAI-PMH from UCTD — University of Cape Town Open Access Repository |
| publishDate | 2019 |
| publishDateRange | 2019 |
| publishDateSort | 2019 |
| publisher | Graduate School of Business (GSB) |
| publisherStr | Graduate School of Business (GSB) |
| record_format | dspace |
| source_str | UCTD — University of Cape Town Open Access Repository |
| spelling | oai:open.uct.ac.za:11427/30575 Determinants of Foreign Direct Investment in Malawi Chimbalu, Mkondana Gumede, Lungelo This study examines empirically the determinants of Foreign Direct Investment in Malawi, by employing annual data that covered the period 1970-2016. The study used a dynamic model, the Autoregressive Distributed Lag bounds-testing approach to co-integration and error correction model, to explore these determinants. The study found that a long run relationship between Foreign Direct Investment and the selected determinants: market size, infrastructure, human capital, broad money, real exchange rate, population growth, government consumption, and inflation. The study further found that the determinants that were significantly associated with attracting Foreign Direct Investment in Malawi included infrastructure, broad money and government consumption. Specifically, the study results found that government consumption is negatively and significantly associated with Foreign Direct Investment both in the short and long run; infrastructure is positively and significantly associated with Foreign Direct Investment in the long run; broad money is positively and significantly associated with Foreign Direct Investment in the long run; and no significant relationship was found between market size, human capital, real exchange rate, population growth, and inflation both in the short and long run. These results have important policy implications for Malawi. These include the need for Malawian authorities to focus on strategies that create incentives to increase the level of physical infrastructure in the country; implementing monetary policies, fiscal incentives and subsidies that promote financial development; as well as promoting FDI-friendly government policies that minimise the impact of distortionary fiscal policies such as distortionary taxation and deregulation. 2019-10-16T07:18:11Z 2019-10-16T07:18:11Z 2019 2019-10-16T07:12:38Z Master Thesis Masters MCom (Development Finance) http://hdl.handle.net/11427/30575 Eng application/pdf Graduate School of Business (GSB) Faculty of Commerce |
| spellingShingle | Chimbalu, Mkondana Determinants of Foreign Direct Investment in Malawi |
| thesis_degree_str | Master's |
| title | Determinants of Foreign Direct Investment in Malawi |
| title_full | Determinants of Foreign Direct Investment in Malawi |
| title_fullStr | Determinants of Foreign Direct Investment in Malawi |
| title_full_unstemmed | Determinants of Foreign Direct Investment in Malawi |
| title_short | Determinants of Foreign Direct Investment in Malawi |
| title_sort | determinants of foreign direct investment in malawi |
| url | http://hdl.handle.net/11427/30575 |
| work_keys_str_mv | AT chimbalumkondana determinantsofforeigndirectinvestmentinmalawi |