The Role Of Foreign Direct Investment For The Export Growth Of Leather Industry In Ethiopia

Exports play a vital role in the economic growth of a country. This study tries to examines the rolernof FDI in export growth of leather industry in Ethiopia. A primary data collected from 15 FDIrnfirms in the leather sector of Ethiopia through surveying and interviewing the GeneralrnManagers, Marketing Managers, Finance Managers and Production Managers. In addition,rnsecondary data also collected from different government institutions like LIDI, ERCA, FIC CSArnand MOI to strengthen the research work. In analyzing the role of FDI in leather, sector exportrnand basic determinants descriptive statistics utilized. The analysis shows the export share of FDIrnfirms reaches 70 per cent of the total leather sector export values. This export volume is veryrnhigh when compared with local firms, which have long-term involvement in the sector. The studyrnalso shows FDI’s vital role in product diversification, value addition, skill transfer, opening newrnmarket route for local firms across value chain. Therefore, in order to increase and maintain thernrole of FDI for export growth of the leather sector strong institutional support needed fromrngovernment and stakeholders.rnCapacity building for all actors in the chain, especially forrndomestic firms to enter international market competition were recommended.rnKeywords: foreign direct investments, Ethiopia, leather sector exports

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