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Implications of Foreign Direct Investment on SME Growth in Zimbabwe: A Case Study of Bulawayo Province

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  • Lawrence Dumisani Nyathi

    (National University of Science and Technology, Lecturer-Department of Banking & Economic Sciences, Faculty of Business & Economic Sciences, Zimbabwe.)

  • Privilege Chikwala

    (National University of Science and Technology, Graduating Candidate-Department of Banking & Economic Sciences, Faculty of Business & Economic Sciences, Zimbabwe.)

Abstract

SMEs in Zimbabwe have withstood the test of time amidst economic decay experienced by the Zimbabwean economy for the past two decades. Since the adoption of progrowth policies in Zimbabwe FDI inflows have significantly increased overtime towards SMEs due because of their nurture to drive growth and economic competitiveness as well as navigating difficult economic landscapes. Therefore the paper investigates the implications of foreign direct investment on SME growth in Bulawayo. A qualitative research approach aligned with interpretivism research philosophy was adopted in this paper. The research subjects were selected using a convenient sampling technique. A total of 20 interviews were conducted with the managers and business owners of SMEs. The related challenges faced by SMEs in the Bulawayo metropolitan are increased competition, access to capital difficulties, skill and technology gaps, and regulatory and bureaucratic hurdles. The findings revealed that FDI plays a multifaceted role in shaping the SME landscape in Bulawayo metropolitan. The positive effects included opportunities for technology transfer, market expansion, improved infrastructure, capacity building, and training opportunities, and inclusion of the small and medium enterprises in supply chain integration. The study recommends a broader discussion with policymakers, business leaders, and other stakeholders to maximise the benefits of foreign direct investment on small to medium enerprises while mitigating its adverse effects.

Suggested Citation

  • Lawrence Dumisani Nyathi & Privilege Chikwala, 2024. "Implications of Foreign Direct Investment on SME Growth in Zimbabwe: A Case Study of Bulawayo Province," International Journal of Research and Scientific Innovation, International Journal of Research and Scientific Innovation (IJRSI), vol. 11(10), pages 526-534, October.
    • Handle: RePEc:bjc:journl:v:11:y:2024:i:10:p:526-534
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    References listed on IDEAS

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    1. De Maeseneire, Wouter & Claeys, Tine, 2012. "SMEs, foreign direct investment and financial constraints: The case of Belgium," International Business Review, Elsevier, vol. 21(3), pages 408-424.
    2. Tsepeso Setoboli & Nothando Tshuma & Emmanuel Sibanda, 2024. "Improving Agricultural Efficiency in Zimbabwe: A Labor Productivity Analysis," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 8(3), pages 2193-2208, March.
    3. Leandro Medina & Mr. Friedrich Schneider, 2018. "Shadow Economies Around the World: What Did We Learn Over the Last 20 Years?," IMF Working Papers 2018/017, International Monetary Fund.
    4. L.R. de Mello Jr., 1996. "Foreign Direct Investment, International Knowledge Transfers, and Endogenous Growth: Time Series Evidence," Studies in Economics 9610, School of Economics, University of Kent.
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