Skip to content
Research Article Open access CC BY 4.0

Foreign Direct Inflows and Economic Growth Nexus in Kenya: Co-integration and Causality Analysis

Mutuku Cyrus, Koech Elias

Journal of Economics, Management and Trade · pp. 161–171 · Published 17 Dec 2014

10.9734/BJEMT/2015/8612

Abstract

The study focused on the co-integration and causality analysis between FDI and GDP for Kenya using annual data spanning 1970 t0 2013. It was established that though the two variables are I(1), they are co-integrated. The VECM framework revealed that FDI has a significant influences GDP both in the long run and short run. A unidirectional causality was established from FDI to GDP, while impulse response functions revealed that a shock in any of the two variables significantly affects each other for a period of one year. The study concludes that FDI enhancing policies would be necessary for economic growth in Kenya.  

FDI inflows economic growth multivariate granger causality VAR VECM

References (13)

  1. 1 Co-Integration and Error Correction: Representation, Estimation, and Testing [DOI]
  2. 2 MAXIMUM LIKELIHOOD ESTIMATION AND INFERENCE ON COINTEGRATION — WITH APPLICATIONS TO THE DEMAND FOR MONEY [DOI]
  3. 3 Foreign direct investment in developing countries and growth: A selective survey [DOI]
  4. 4 Aid and growth regressions [DOI]
  5. 5 Spillovers, foreign investment, and export behavior [DOI]
  6. 6 Mapping the institutional capital of high-tech firms: A fuzzy-set analysis of capitalist variety and export performance [DOI]
  7. 7 DOES FOREIGN DIRECT INVESTMENT PROMOTE ECONOMIC GROWTH? EVIDENCE FROM EAST ASIA AND LATIN AMERICA [DOI]
  8. 8 Do domestic firms learn to export from multinationals? [DOI]
  9. 9 Industrial Linkages and Export Spillovers from FDI [DOI]
  10. 10 Does FDI work for Africa? Assessing local spillovers in a world of global value chains [DOI]
  11. 11 How Does Foreign Direct Investment Affect Economic Growth? [DOI]
  12. 12 Foreign Capital and Economic Growth [DOI]
  13. 13 Economic development in Nigeria through the agricultural, manufacturing and mining sectors : an econometric approach

Cited by 2

Ethiopian Economic Growth Under Fiscal and Monetary Policy Shocks: Evidence from a Structural Var Model

Tale Geddafa · Studia Universitatis „Vasile Goldis” Arad – Economics Series · 2026

Showing 1 of 2 known citations — external sources report more than can currently be individually listed.

Related research

Article metrics

Real usage data collected on this platform.

70

Page views

0

PDF downloads

38

Outbound clicks

2

Citations

Views over time

Views by country

Approximate, from request IP at view time — not citizenship or institution. Countries with fewer than 5 views are grouped as "Other".

Traffic sources

Referring site, by host.

Views and downloads exclude known bots/crawlers. Citations combines this platform's own DOI-resolved index with each external source's own reported total — see Cited by above for individually listed citing works. Last refreshed 0 seconds ago.