The Impact of Foreign Direct Investment on Employement Creation in Tanzania

Abstract

As an engine of economic development for developing countries, foreign direct investment (FD) inflows have contributed for creation of employment, technology transfer to local firms, and managerial know-how; have had positive effects on exports and access to external markets. This study tries to analyze the impact foreign direct investment (FDI) inflows on employment generation/creation of Tanzania. It specifically estimates the effect of FDI on employment creation in Tanzania for the period of 1990 to 2008. The study adopted a case study design with a quantitative research approach and it represents an econometric analysis using statistical package for social sciences (SPSS). The results show that there is strong (positive) relationship between the variables. This means that foreign direct investments (FDI) have a big significant impact on the pattern of employment opportunities. Then from above analysis we may conclude that Tanzania’s employment creation especially, does depend upon foreign direct investment inflows.