Contribution of Foreign Direct Investment on the Growth of Agro-Processing Sector: A Case of Selected Agro-Processing Companies in Kenya

Abstract

World Investment Report’s like United Nations Conference on Trade and Development (UNCTAD) detail trends in global foreign direct investments in which Kenya is ranked below its neighbours and other emerging markets. This study evaluated the contribution of Foreign Direct Investment on the growth of Agro-Processing Sector. The objectives of the study were to determine the extent of use of FDI and its contribution on the growth of Agro processing sector.  This study adopted a survey design. The study target population was 350 respondents. Sample size was 78 respondents selected using simple random sampling.  A structured questionnaire was used to collect data which was  analyzed using descriptive statistics, regression analysis and a 5 point Likert scale. Study results showed that Foreign Direct Investment in the Agro processing Sector influenced technology spill over, creation of employment opportunities and resource improvement; FDI accelerated to a greater extent growth in the sector; and a positive relationship existed between FDI and growth of the agro processing sector;  correlation oefficients determined confirmed a positive association between FDI and growth of the sector where  production volumes

and profit are output variables that measure growth in the agro-processing sector.

Key words: Foreign Direct Investment, growth, Agro-processing Sector, Kenya