There is little documentation on the role of absorptive capacity on the relationship between FDI and performance of firms. This paper investigates the mediating role of absorptive capacity on the relationship between FDI and performance of manufacturing firms in Kenya. The population of study comprised 100 companies registered with Kenya Association of Manufacturers that had over 10 percent foreign ownership as at the time of data collection in 2019. The respondents were the CEOs of organization or their designated officers. The study used a structured questionnaire to collect primary data. The respondent were required to indicate how the introduction of FDI impacted on organizations capital flow, advanced production technology, marketing expertise and management knowhow. They were also to indicate the extent their Organisation had invested in absorptive capacity and the effect absorptive capacity had on the relationship between FDI and local firm performance. Descriptive and inferential statistics were both used to analyze the data. The results revealed that absorptive capacity has statistically significant mediating effect on the relationship between FDI and firm performance. This imply that an incremental change in the absorptive capacity would generate growth in company’s performance. As such Kenyan and other sub-Sahara African countries government need to come up with polices geared to supporting improvement of firms absorptive capacities so as to spur the growth of their key sectors of the economy.

This paper investigates the effect of FDI on performance of manufacturing firms in Kenya. Little is documented about the link between FDI and performance of local firms in Kenya . The study has sought to establish the overall effect of FDI on the performance-manufacturing firms in Kenya. The population of study comprised 100 companies registered with Kenya Association Manufacturing as at the time of data collection in 2019 and that had over 10 percent foreign ownership. The respondents were the CEOs of organization. The study used a structured questionnaire to collect primary data. Descriptive and inferential statistics were both used to analyze the data. Data was pretested for normality, linearity, multicollinearity, autocorrelation and homoscedasticity and the data found to meet most of these preconditions. The study developed hypothesis which was tested using simple linear regression to establish the effect of FDI on performance of manufacturing firms. The results revealed that there was a statistically significant relationship between FDI and firm performance. This imply that to achieve better firm performance, the government need to come up with polices geared to attracting more FDI into the key sectors of the economy.

This paper investigates the effect of FDI on performance of manufacturing firms in Kenya. Little is documented about the link between FDI variables of capital flow, advanced production technology, marketing expertise and management know-how and performance of firms. The study’s sought to establish the effect of each individual FDI variables on firm’s performance. It also sought to established the overall effect of the performance manufacturing firms in Kenya. The population of study comprised 100 companies registered with Kenya Association Manufacturing as at the time of data collection in 2019 and that had over 10 percent foreign ownership. The respondents were the CEOs of organization. The study used a structured questionnaire to collect primary data. Descriptive and inferential statistics were both used to analyze the data. Data was pretested for normality, linearity, multicollinearity, autocorrelation and homoscedasticity and the data found to meet most of these preconditions. The Pearson correlation analysis was employed to discern not only the strength but also the direction of the interrelationships involving the variables. The researcher tested the effect of the components of FDI on performance of manufacturing firms. The study developed one hypothesis and four sub hypothesis. The results revealed that there was a statistically significant relationship between FDI and firm performance. This imply that to achieve better firm performance, the government need to come up with policies geared to attracting more FDI into the key sectors of the economy. Keywords: Foreign Direct Investment, Firm Performance, Capital Flow, Advanced Production Technology, Marketing Expertise, Management Knowhow.

This paper focuses on investigating the moderating role of business environment on the relationship between FDI and the performance of manufacturing firms in Kenya. Little information is documented on the role of business environment on the relationship between FDI and the performance of firms. The study population comprised of 100 companies registered with KAM as at the time of data collection in 2019, with 10 percent or more foreign ownership. The research used a structured questionnaire to collect primary data. To analyze data, descriptive and inferential statistics was used. The results revealed that there was a statistically significant moderating effect on the relationship between FDI and firm performance. This implies that an incremental change in the interaction between FDI and business environment would generate growth in company’s performance. In Kenya and other SubSahara African countries, the government needs to come up with polices geared towards improving their business environment to spur the growth of the key sectors of the economy.