TITLE:
A Case Study of Market Strategy in Foreign Direct Investment in Kenya’s Construction Industry
AUTHORS:
Weijun Liu
KEYWORDS:
Foreign Direct Investment, Business Management, Construction Industry, Economics, Kenya
JOURNAL NAME:
American Journal of Industrial and Business Management,
Vol.13 No.7,
July
27,
2023
ABSTRACT: The widespread consensus is that foreign direct
investment (FDI) plays a crucial role in both economic growth and the
integration of nations into the global economy. In Kenya, FDI has become the
primary source of funding and is essential for the growth of the construction
industry. Given the various factors that influence FDI in the Kenyan
construction sector, it is necessary to consider them when conducting business
in the country. Therefore, this study aims to examine the impact of economic,
political and social, factors in Kenya on foreign construction companies’ investments. The study employs a qualitative analysis approach and gathers data
from secondary literature, government reports, statistics, and publicly
available information sources such as the IMF and World Bank etc. The study
analyzed using SWOT, PESTEL and Space Matrix tools with case study. The findings reveal that economic factors such as
GDP, inflation, interest rates significantly affect investment in the
construction industry. The political factors, including election and government
corruption, also influence investor decisions. Additionally, strict
environmental regulations have an impact on the construction investment
industry. The study also highlights that construction investors’ management
strategies during economic and social fluctuations align with the company’s
financial reports. The
findings suggest that FDI in the construction industry primarily manifests
through the business activities of construction companies. Economic and
political factors play a significant role in shaping investment decisions and
project management within the construction industry. Consequently, changes in
Kenya’s macro-investment environment directly impact the market strategies of
foreign investors in the construction sector. These insights could serve as a
reference for the Kenyan government in policy formulation and assist
construction companies and investors in devising operational strategies to
tackle challenges and mitigate risks.