Nexus between Doing Business Indicators and Foreign Direct Investment for Zimbabwe : A Time Series Analysis

For many developing nations, foreign direct investment inflows remain crucial for economic development. The levels of FDI inflows in Zimbabwe, have remained relatively low as compared to other developing nations. The study seeks to analyse the impact of various Ease of Doing Business Indicators on FDI inflows in Zimbabwe. A trend analysis for ease of doing business indicators was done to check on how the regulatory environment has been changing using 2004-2016 data. The study employed a Time Series Analyses using data from 2009 to 2016, defining the multi-currency period for the Zimbabwean nation. An OLS regression model was run using Stata Statistical Software, after proper data transformation and relevant statistical tests. Four indicators were found to significantly affect FDI flows. The study found that Enforcing Contracts, Paying Taxes, Getting Electricity and Dealing with Construction Permits are the significant indices to explain FDI flows in the country. The study recommends that; for FDI inflows to improve significantly in future, there is greater need to improve efficiency in the enforcement of contracts, fair distribution of electricity and energy, improving taxes procedures and compliance enforcement and correctly dealing with construction permits