Foreign direct investment, productivity spill-overs and technology transfer on welfare of employees in selected service and manufacturing sectors in Uganda

Abstract

The researcher undertook to carry out a study about the relationship between foreign direct investments and welfare. A conceptual framework was developed relating to FDI, productivity spillovers, technology transfer and welfare. The specific objectives that guided the study were; to examine the relationship between FDI and productivity spillovers, to investigate the relationship between FDI and technology transfer, FDI and welfare; productivity spillovers and technology transfer, productivity spillovers and welfare; and technology transfer and welfare. A longitudinal and quantitative research design was used to collect the data from the various government institutions and departments. Quota and simple random sampling techniques were used to select the data. Net FDI inflows, employment levels and value of production were analysed and presented using descriptive statistics while the relationship was examined using Auto- regression model called ARIMA to predict the changes in welfare. The main findings show that increase in FDI may lead to a significant increase in productivity spillovers and welfare and there exists a significant relationship between them. The results further showed that FDI inflows do not necessary mean an increase in technology transfer; there was a positive relationship though not significant.