Joint effect of Tax Incentives, International Competitiveness and Investment Climate on Foreign Direct Investments among the East Africa Community Partner States

Abstract

Developing countries recognizes foreign direct investment as a source of modernization and economic development. Therefore the study objective was to establish the joint effect of tax incentives, international competitiveness and investment climate on foreign direct investment in East Africa Community Partner States. The study was carried out in the five states in the East Africa Community: Tanzania, Rwanda, Kenya, Burundi, and Uganda. South Sudan was excluded because of lack of data. The unit of analysis was the individual partner state. The study employed secondary data covering a period of 16 years from 2002 to 2017. This objective was achieved by running a pooled OLS regression model. The study revealed that, jointly, tax incentives, international competitiveness and investment climate had statistically significant influence on FDI inflow and   accounted for 13.48% variations of FDI inflow.  

Keywords: Investment Climate, Tax Incentives, Foreign Direct Investment, East Africa Community Partner States