Open AccessModerating Effect of Business Environment on the Relationship Between Foreign Direct Investment and Local Firm’s Performance
Author(s) -
M. D. Wanjere,
Mary Kinoti,
X N Irai,
Martin Ogutu
Publication year - 2021
Publication title -
european scientific journal
Language(s) - English
Resource type - Journals
eISSN - 1857-7881
pISSN - 1857-7431
DOI - 10.19044/esj.2021.v17n27p131
Subject(s) - foreign direct investment , business , business environment , government (linguistics) , descriptive statistics , data collection , population , moderation , industrial organization , marketing , business administration , economics , statistics , linguistics , philosophy , mathematics , demography , sociology , macroeconomics
This paper focuses on investigating the moderating role of business environment on the relationship between FDI and the performance of manufacturing firms in Kenya. Little information is documented on the role of business environment on the relationship between FDI and the performance of firms. The study population comprised of 100 companies registered with KAM as at the time of data collection in 2019, with 10 percent or more foreign ownership. The research used a structured questionnaire to collect primary data. To analyze data, descriptive and inferential statistics was used. The results revealed that there was a statistically significant moderating effect on the relationship between FDI and firm performance. This implies that an incremental change in the interaction between FDI and business environment would generate growth in company’s performance. In Kenya and other SubSahara African countries, the government needs to come up with polices geared towards improving their business environment to spur the growth of the key sectors of the economy.