Determinants Of Foreign Direct Investment In Ethiopia

Course ID
Ethiopian Economics Association (EEA)
Getnet Astatike


In their attempt to attract Foreign Direct Investment (FDI), most African countries have liberalised trade and attempted to create enabling environment in recent decades. Ethiopia, like many African countries, took some steps towards liberalising trade and the macro-economic regime as well as introducing some Measures aimed at improving the FDI regulatory framework. This paper attempts to study the nature and determinants of foreign direct investment in Ethiopia over the period 1974-2001. The study gives an extensive account of the theoretical explanation of FDI as well as reviewing the policy regimes, the FDI regulatory framework and institutional set up in the country over the study period. It also undertakes empirical analysis to establish the determining factors of FDI in Ethiopia. Our findings show that growth rate of real GDP, export orientation, and liberalisation, among others, have positive impact on FDI. On the other hand, macro-economic instability and poor infrastructure have negative impact on FDI. These findings imply that liberalisation of the trade and regulatory regimes, stable macro-economic and political environment, and major improvements in infrastructure are essential to attract FDI to Ethiopia.

Corporate Author: Getnet Alemu and Getachew Yoseph (Editor) & Ethiopian Economic Association/Ethiopian Economic Policy Research Institute
Publisher: Ethiopian Economic Association (EEA)
ISBN/ISSN: 978-9994-54-03-7
Primary Descriptors:

direct Investment

Secondary Descriptor:


Geographic Descriptors: Ethiopia
Cataloge Date: 02/27/2013
Broad Subject heading: GROWTH AND DEVELOPMENT
Call Number: 330.963 PRO 2007
Serial Key Title: Proceedings of the Fourth International Conference on the Ethiopian Economy
Publication catagory: International Conference
Content type: EEA Publication
Volume: I
Publication date: 2013-05-27 00:00:00
Forum or Discussion date: 2013-02-27 00:00:00
PDF file:  Getnet And Hirut_Determinants of foreign direct Investment in Ethiopia.pdf
Place of publication: Addis Ababa, Ethiopia
Type of material: Book
Current frequency: Annualy
Author: Getnet Astatike & Hirut Assefa

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