Economics (FSS)
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Item Foreign direct investment (FDI) and its impact on employment creation: The case of manufacturing sector in Tanzania(International Journal of Current Innovation Research, 2016) Utouh, Harold M.L.; Rao, M KoteswaraThe purpose of this paper is to provide an analytical insight into Foreign Direct Investment (FDI) on employment creation in Tanzania, centring on the manufacturing sector which is held as a conduit for social economic development. It analyses the concerted efforts on the part of the government in attracting conspicuous FDI, and in particular, the relationship between the increase in FDI and employment generation. Tanzania started to adopt economic reforms and open policy in the mid-1980s. However, the speed of the Tanzanian government's established policy to attract FDI was more felt in the 1990s and since then the degree of successful efforts to attract FDI has increased. Methodology - The data used in this study consists of total employment, GDP and inward foreign direct investment (FDI). These annual data covered the period from 1980 to 2012 because it is only in this period that the data is available. The methodology to test the effects of the variables i.e., FDI, GDP and Employment creation has been confined to the least squares technique. The co-integration of the variables has been ascertained via the application of the Augmented Dickey-Fuller Test and is found to hold in the long run. Findings – the findings indicate that FDI has a positive and significant effect on employment generation in Tanzania and GDP is translated to have influenced the economic growth. Practical implications – A conducive business environment, a more liberalised economy, institutional restructuring and enhanced private sector-led development will lead to an increase in foreign investment. Local entrepreneurial capacity should be empowered if the country wishes to have sustainable growth and employment creation. Originality - The paper presents original findings based on research related to FDI and employment creation in the sector of manufacturing industries.Item Relationship between foreign direct investment, exports and economic growth in Tanzania: A time series analysis(Mzumbe University, 2013) Bomani, Bertha AlfredForeign Direct Investment (FDI) and exports play a significant role in promoting economic growth in many countries. However, empirical studies have not found consistent results, with some literature indicating that FDI and export have adverse impacts to the economy. This study examined long run and causality relationships between FDI, exports and economic growth for Tanzania. The study used time series data for 30 years (1980- 2010) which were obtained from TIC and UNCTAD. By using Johansen test of cointegration, Vector Autoregression model and Granger causality test the study found that there was a single cointegrating vector. The equation was relating FDI and exports (as independent variables) to Economic growth, the dependent variable. Furthermore, there was unidirectional causality relationship with the direction from FDI and exports to GDP growth rate (economic growth). There was also a unidirectional causality with the direction from FDI to exports. Therefore, FDI Granger caused GDP growth rate and exports, while exports Granger caused GDP growth rate only. This further implied that, FDI have a direct and indirect causality to GDP growth rate. This observation necessitated the special consideration for making FDI working for growth. Likewise for total exports which had positive and significant relationship to economic growth. The findings in this study support the export-led growth hypothesis and FDI as the engine for economic growth. For export and FDI to effectively promote growth, the study recommends that policy frameworks and incentive packages should be competitive and vigorous enough.