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Foreign Direct Investment and Firm Level Productivity in Kenyan Manufacturing: A Panel Data Analysis

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  • Geoffrey G. Gachino

    ()
    (College of Business Administration, University of Dubai)

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    Abstract

    This paper uses panel data to examine the effects of foreign presence on firm level productivity in the Kenyan manufacturing industry employing “traditional” and “recent” methodologies using the production function framework. The results show that foreign firms dominated in virtually all the economic activities, including productivity performance. The analysis of productivity determinants using a technologically profound approach produced a statistically significant role played by foreign presence on firm level productivity, thus supporting the occurrence of spillovers. The paper argues that the use of productivity based methodologies largely masks the nature, actual processes and mechanisms through which spillovers occur. The paper, therefore, advocates a “paradigm shift” in the spillover analysis techniques and recommends a broader approach with particular emphasis on technological innovations which takes into consideration learning, capability building and innovation.

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    File URL: http://ijie.um.edu.my/RePEc/umk/journl/v2i1/a2.pdf
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    Bibliographic Info

    Article provided by Faculty of Economics and Administration, University of Malaya in its journal International Journal of Institutions and Economies.

    Volume (Year): 2 (2010)
    Issue (Month): 1 (April)
    Pages: 17-57

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    Handle: RePEc:umk:journl:v:2:y:2010:i:1:p:17-57

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    Related research

    Keywords: - FDI; foreign presence; spillovers; productivity; technological innovation;

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    Cited by:
    1. Geoffrey G. Gachino, 2011. "Determinants of FDI Spillover in the Kenyan Manufacturing Industry: Firm-Level Evidence," International Journal of Business and Economics, College of Business, and College of Finance, Feng Chia University, Taichung, Taiwan, vol. 10(3), pages 235-255, December.

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