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Factors affecting fdi flow in ethiopia: an empirical investigation

Author:

Amanuel Mekonnen Workneh

Subject Area:

Social Sciences and Humanities

Abstract:

This paper examined the determinants of foreign direct investment in Ethiopia. Five variables including market size, level of trade openness, inflation rate, infrastructure, and human capital were used. Time-series data covering a 21-year period (1990-2011) were obtained from the World Bank and analyzed using multivariate ordinary least square regression. The findings show that level of trade openness and inflation rate of Ethiopia have had a significant impact on the flow of foreign direct investments to Ethiopia. No clear relationship was obtained for market size, infrastructure, and human capital.

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