Determinants of FDI in Tanzania Based on Gravity Model Results
By: Marcin Salamaga and Raphael Erineus Haule
References
- Anderson, J.E. (1979). A theoretical foundation for the gravity equation. American Economic Review, 69(1), 106–116. DOI: 10.1177/000841747904600316.
- Asiedu, E. (2002). On the determinants of foreign direct investment to developing countries: is Africa different? World development, 30(1), 107-119, DOI: 10.1016/S0305-750X(01)00100-0.
- Blomström, M., Kokko, A., Mucchielli, J.L. (2003). The economics of foreign direct investment incentives. In: Foreign direct investment in the real and financial sector of industrial countries (pp. 37–60). Springer Berlin Heidelberg.
- Chakrabarti, A. (2001). The determinants of foreign direct investments: Sensitivity analyses of cross‐country regressions. Kyklos, 54(1), 89–114, DOI: 10.1111/1467-6435.00142.
- Dunning, J.H. (1988). The eclectic paradigm of international production: a restatement and some possible extensions. Journal of International Business Studies, 19(1), 1–31, DOI: 10.1057/palgrave.jibs.8490372.
- Dauti, B. (2015). Determinants of foreign direct investment in transition economies, with special reference to Macedonia: Evidence from gravity model. South East European Journal of Economics and Business, 10(2), 7–28.
- De Mello Jr, L.R. (1997). Foreign direct investment in developing countries and growth: A selective survey. The journal of development studies, 34(1), 1–34, DOI: 10.1080/00220389708422501.
- Epaphra, M. (2016). Determinants of export performance in Tanzania. Journal of Economics Library, 3(3), 470–487, DOI: 10.1453/jel.v3i3.1015.
- Hansen, H., Rand, J. (2006). On the causal links between FDI and growth in developing countries. The World Economy, 29(1), 21–41, DOI: 10.1111/j.1467-9701.2006.00756.x.
- Head, K., Ries, J. (2008). FDI as an outcome of the market for corporate control: Theory and evidence. Journal of International Economics, 74(1), 2–20, DOI: DOI:10.1016/j.jinteco.2007.04.004.
- Helpman, E. (1984). A simple theory of international trade with multinational corporations. Journal of Political Economy, 92(3), 451–471, DOI: 10.1086/261236.
- Helpman, E., Melitz, M.J., Yeaple, S.R. (2004). Export versus FDI with heterogeneous firms. American Economic Review, 94(1), 300–316, DOI: 10.1257/000282804322970814.
- Hemed, L.I., Githui, T., Mathenge, P. (2018). Factors Influencing Foreign Direct Investment in Tanzania. International Journal of Research in Management, Economics and Commerce, 8(3), 141–148.
- Hermes, N., Lensink, R. (2003). Foreign direct investment, financial development and economic growth. The Journal of Development Studies, 40(1), 142–163, DOI: 10.1080/00220380412331293707.
- James, S. (2009). Incentives and investments: Evidence and policy implications. Washington, USA, Investment Climate Advisory Services of the world Bank Group.
- Johnson, A. (2006). FDI inflows to the transition economies in Eastern Europe: magnitude and determinants. The Royal Institute of Technology, CESIS (Centre for Excellence for Studies in Science in Innovation), Paper No 59.
- Kis, K., Bihari, K. (2017). The impact of FDI, foreign aid and remittances on the East African Community’s intra-regional trade: A gravity model analysis. Im Business, 2(2), 41–66.
- Kojima, K. (1973). A Macroeconomic Approach to Foreign Direct Investment. Hitotsubashi Journal of Economics, 14(1): 1–21, DOI: 10.15057/8008.
- Kumar, N. (2002). Globalization and the quality of foreign direct investment. Oxford Univ Press.
- Luhwago, W., Philip, D., Kadigi, R., Mgeni, C., Kangile, R. (2023). The Determinants and Competitiveness of Rice Export in Tanzania: A Vector Error Correction Model. East African Journal of Science, Technology and Innovation, 4(3).
- Mahona, B.K., Mjema, G.D. (2014). Determinants of Tanzania and Kenya Trade in the East African Community: A Gravity Model Approach. Journal of Economics and Sustainable Development, 5(4), 13–23, DOI: 10.5539/ijef.v11n4p1.
- Markusen, J.R., 2002. Multinational firms and the theory of international trade. Cambridge, MA: MIT Press.
- Mdee, E.O., Aikaeli, J. (2023). The Impact of Taxation on Foreign Direct Investment (FDI) Inflows in Tanzania. London Journal of Research in Management and Business, 23(6), 27–42.
- Mishra, B.R., Jena, P.K. (2019). Bilateral FDI flows in four major Asian economies: a gravity model analysis. Journal of Economic Studies, 46(1), 71–89, DOI: 10.1108/JES-07-2017-0169.
- Mundell, R.A. (1957). International trade and factor mobility. The American Economic Review, 47(3), 321–335.
- Nadine, A.A., Ashraf, S., Nagia, R. (2021). The impact of relative exchange rate volatility and other multidimensional determinants on FDI in Egypt. American Journal of Industrial and Business Management, 11(12), 1163–1197.
- Oman, C. (ed.) (2000). Policy competition for foreign direct investment: A study of competition among governments to attract FDI. OECD Publishing.
- Ozawa, T. (1992). Foreign direct investment and economic development. Transnational corporations, 1(1), 27–54.
- Resmini, L. (2000). The determinants of foreign direct investment in the CEECs: new evidence from sectoral patterns. Economics of transition, 8(3), 665–689. DOI: 10.1111/1468-0351.00060.
- Shun-Chiao, Ch. (2009). Horizontal and Vertical Intra-industry Trade and Firm’s Investment Strategies: Evidence from the IT Industry in the Asian, EU and US Markets. Global Economic Review, 38(1): 63–76, DOI: 10.1080/12265080802692696.
- Sieng, L.W., Alimawi, M.Y., Baharin, R. (2020). Impact of macroeconomics variables on exports in Indonesia, Philippines, Malaysia and Thailand. Journal of Contemporary Issues and Thought, 10, 46–57. DOI: 10.37134/jcit.vol10.sp.5.2020.
- Stöwhase, S. (2006). Tax-Rate Differentials and Sector Specific Foreign Direct Investment: Empirical Evidence from the EU. Mohr Siebeck, Tübingen, FinanzArchiv: Public Finance Analysis, 61(4), 535–558.
- Sultana, M., Rahman, M.H., Zimon, G. (2024). The Impact of External Debt and Exchange Rate on Foreign Direct Investment in Emerging Investment Markets: New Evidence Using a Pmg-Ardl Panel Data Analysis. Cogent Economics & Finance, 12(1), 2362780. DOI: 10.1080/23322039.2024.2362780.
- Tanzania Investment Report (2023). Foreign Private Investments, Bank of Tanzania. Retrieved from https://www.bot.go.tz/Publications/Filter/5.
- Tinbergen, J. (1962). Shaping the World Economy: Suggestions for an International Economic Policy. New York: The Twentieth Century Fund.
- Tsitouras, A., Mitrakos, P., Tsimpida, C., Vlachos, V., Bitzenis, A. (2020). An investigation into the causal links among FDI determinants: Empirical evidence from Greece. Journal of East-West Business, 26(1), 17–55.
- Wells, L.T., Allen, N.J., Morisset, J., Pirnia, N. (2001). Using tax incentives to compete for foreign investment. FIAS Occasional Paper, 15.
- Zee, H.H., Stotsky, J.G., Ley, E. (2002). Tax incentives for business investment: a primer for policy makers in developing countries. World development, 30(9), 1497–1516, DOI: 10.1016/S0305-750X(02)00050-5.
- Zhang, K.H. (2001). Does foreign direct investment promote economic growth? Evidence from East Asia and Latin America. Contemporary economic policy, 19(2), 175–185, DOI: 10.1111/j.1465-7287.2001.tb00059.x.
Language: English
Page range: 213 - 228
Submitted on: Jan 16, 2025
Accepted on: Apr 9, 2026
Published on: Jun 29, 2026
Published by: University of Szczecin
In partnership with: Paradigm Publishing Services
Keywords:
Related subjects:
© 2026 Marcin Salamaga, Raphael Erineus Haule, published by University of Szczecin
This work is licensed under the Creative Commons Attribution-ShareAlike 4.0 License.