RUAHA CATHOLIC UNIVERSITY

The main objective of the study was to determine effects of foreign direct investment on economic growth of Tanzania. The specific research objectives of the study were to examine the effect of capital inflow from FDI on economic growth, to determine whether or not transfer of new technology from foreign investors has affect economic growth, and to identify if creation of employment from FDI has effect on economic growth. The Neo-classical Growth Theory and The Monopolistic Advantage theory are supported by the study's findings. The study employed a quantitative research approach. The target population of the study was the population from the society how are involved within agriculture and industrial sector and work with foreign investors in Tanzania. The sample period was the period 2007 to 2022. Diagnostic and model specification tests were done on the data. Some data was treated of the problems of times series data and a suitable model, that would address the problems of untreated data was selected. With the aid of Eviews software the study used least squares regression model to perform a regression of the independent variables on the dependent variable. Results were interpreted based on the regression output. On objective one which was to examine the effect of capital inflow from foreign investors, the study found that there is a positive significant relationship with economic growth of Tanzania. The second objective was to determine whether or not transfer of new technology from foreign investors has affected economic growth. The study found that transfer of new technology had a positive significant relationship with economic growth of Tanzania. The third objective was, to identify creation of employment from FDI has effect on economic growth.

Foreign direct investments, economic growth