Role of foreign direct investment in economic growth, a case of Uganda

Abstract

In a decade or two, Foreign Direct Investments (FDI) have been sought by most, if not all, developing countries as a means of complementing the level of domestic investment, as well as securing economy-wide efficiency gains through the transfer of appropriate technology, knowledge and/or talent management, access to foreign markets, increasing employment opportunities, and improving standards of living. Like other developing countries, Uganda is also seeking to enhance the inflow of FDI through various policies. The aim of the study was to investigate the impact of FDI on the economic growth of Uganda. The cross-sectional design was used and the study found that the beneficial role of FDI in growth and determinants thereof. The study findings reveal that FDI is a catalyst for economic growth and development. This study also observes that availability of good infrastructure and labor cost are the major determinants of FDI. The study finally revealed that there is a positive relationship between FDI and economic growth. The paper concludes with suggesting some policy recommendations. Keywords: Impact, foreign direct investment, Economic Growth, Multi-National Corporations