Investigating the Impact of Foreign Direct Investment (FDI) Inflows on Zimbabwe's Economic Growth, Comparing the Pre- and Post-Dollarization Periods
Year: 2026
Type: article
Abstract: This study investigates the impact of Foreign Direct Investment (FDI) inflows on Zimbabwe's economic growth, contrasting the pre- and post-dollarization periods. It explores how the adoption of foreign currencies in 2009—primarily the US dollar—transformed the economic landscape, influencing investment patterns and growth trajectories. The research aims to illuminate the relationship between FDI and economic performance during these distinct periods, addressing critical questions about the effectiveness of FDI in promoting sustainable economic growth amidst Zimbabwe's fluctuating economic environment. The study employs a quantitative methodology using macroeconomic indicators from 2000 to 2023, utilizing a Multiple Linear Regression Model (MLRM) to analyze the relationship between FDI and GDP growth. Key findings reveal that FDI inflows positively affected economic growth in both periods, with institutional quality and macroeconomic stability playing significant roles in enhancing the effectiveness of FDI post-dollarization. The results indicate that while pre-dollarization was marked by hyperinflation and instability deterring foreign investment, the post-dollarization period saw improved investor confidence and economic recovery. This research contributes valuable insights for policymakers aiming to create a conducive environment for investment in Zimbabwe and offers lessons for other developing economies facing similar challenges. By integrating economic theories such as Endogenous Growth Theory and the Investment Development Path, the study provides a comprehensive understanding of FDI's role in shaping Zimbabwe's economic trajectory
Author: Garikai Muzondo
Institution: Lupane State University
Language: English
Subfield: Strategy and Management
Domain: Social Sciences
Open Access status: hybrid
OpenAlex ID: W7211943224