Econometric Analysis of Foreign Direct Investment in the Zimbabwean Mining Sector 2005-2014 - Theoretical Economics Letters

TEL > Vol.8 No.14, October 2018

Econometric Analysis of Foreign Direct Investment in the Zimbabwean Mining Sector 2005-2014 ()

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Download as PDF (Size: 358KB) PP. 3157-3177

DOI: 10.4236/tel.2018.814196 764 Downloads 2,102 Views Citations

Author(s)

Plaxedes Gochero

Affiliation(s)

Open University of Mauritius, Moka, Mauritius.

ABSTRACT

The paper analyses the determinants and the effects of foreign direct investment inflows (FDI) in the Zimbabwe Mining Sector (ZMS) in a specific study for 14 minerals from 2005-14 estimating a random effect model. Mineral specific variables examined include capacity utilisation, volume of manufacturing index, labour cost, sectorial contribution to Gross Domestic Product (GDP), political instability, mineral price and mineral output. FDI inflow in the ZMS can be explained by capacity utilisation, volume of manufacturing index, labour, sectorial contribution to GDP and political instability. No statistical evidence could be established to support mineral price and output as major determinants of FDI in the mining sector. All these variables confirmed with literature except for volume of manufacturing index. As a result, the government is recommended to put in place supportive policies that encourage investments and recapitalization in the mining sector so that local firms can effectively compete at both domestic and international investment markets.

KEYWORDS

Foreign Direct Investment Inflow, Zimbabwean Mining Sector

Share and Cite:

Gochero, P. (2018) Econometric Analysis of Foreign Direct Investment in the Zimbabwean Mining Sector 2005-2014. Theoretical Economics Letters, 8, 3157-3177. doi: 10.4236/tel.2018.814196.

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