Foreign Investment and Economic Development: Evidence from Private Firms in East Africa

In this CGD Brief, Todd Moss and Vijaya Ramachandran highlight the important positive effects resulting from foreign direct investment in Africa. They base their study on a survey of 300-400 manufacturing firms in Kenya, Tanzania and Uganda. Their main finding? Foreign firms perform better than local firms in generating jobs, reporting higher value added per worker, and in staff training. The authors suggest that governments should focus on attracting investment that generates jobs and builds human capital.

This Brief is based on Working Paper 41: "Is Africa's Skepticism of Foreign Capital Justified? Evidence from East African Firm Survey Data.