TITLE:
Econometric Analysis of Foreign Direct Investment in the Zimbabwean Mining Sector 2005-2014
AUTHORS:
Plaxedes Gochero
KEYWORDS:
Foreign Direct Investment Inflow, Zimbabwean Mining Sector
JOURNAL NAME:
Theoretical Economics Letters,
Vol.8 No.14,
October
26,
2018
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.