A time series analysis of foreign direct investment in Zimbabwe from 1970-2013
Dhliwayo, Percevearance S.
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Foreign Direct Investment (FDI) plays an important role in developing country like Zimbabwe. It is needed because it determines to the development of the nation, by upgrading social and economic development. If there is a decrease in FDI, then the will be economic slowdown. This research focuses on establishing trends in FDI, deriving inferential results and making recommendations to stakeholders about possible ways of improving inflows. The research contributed to the researcher’s knowledge pool and provides information to the government of Zimbabwe and other stakeholders on the current state of FDIs and future trends. The study will assist the government through forecasting future trends of FDIs and help the country in matters to do with ownership of property and companies under the Indigenisation Act. The study adopted the quantitative research design and probability sampling technique was used to draw sample. Secondary data from World Bank was used. The study analysed, FDI inflows in Zimbabwe from 1970-2013 using the Box-Jenkins modelling techniques. The ARIMA (0, 1, 0) was chosen based on the autocorrelation and partial autocorrelations functions. Model estimation was carried out using method of Least squares with SPSS statistical software package. FDI was on an increasing trend up to 2004 from which it then declined up to 2014. Since the model was produced, the researcher recommends other fellow students to further investigate the time series of FDI using other significant methods which were not considered in the research in order to come up with the best model. Policy makers should make use of these models so that they will have full knowledge of the inflow of FDI so as to have the appropriate budget.