Assessing Implications of Manufacturing Industry Structure and Legal Framework, Among Others, on FDI in Zimbabwe, 1998–2021

Attracting FDI is increasingly fiercely contested as nations jostle for preference as investment destinations. The FDI impact on economies is widely documented whereas inferences on the effects of independent variables on FDI are scarce. This study assessed the influence of multiple independent variables on sector FDI trends between 1998 and 2021. At its highest, Zimbabwe’s manufacturing sector contributed up to 22% of GDP in 1999, trailing behind mining and agriculture. However, the sector FDI fell by 86% from its 1998 highest, followed by more than 400 manufacturing company closures and a fall in capacity utilisation to below 50%. Singapore, China, Japan, and Kosovo’s FDI success stories inspired this study. For purposes of generalisability and replicability, this cross-sectional quantitative study used a 5-point Likert-scaled self-administered questionnaire to gather ordinal data from 401 business executives and foreign diplomats. Cronbach’s alpha and composite reliability helped to determine construct reliability while AVE scores measured convergent validity, Spearman’s Rho estimated construct validity and structural equation modelling inferred for relationships between observed and underlying study constructs before applying the non-parametric Mann-Whitney U test for a 5% significance level. Cramer’s V outlined the effect size and the order of priorities, and the hypotheses test results identified investment laws, the country’s perceived risk, and the ease of doing business as relevant and significant influencers to sector FDI trends in the study period. Other exciting findings include discorded stakeholder perceptions. This study pioneered a multi-factor investigation that triangulated eclectic and systems theories to establish the empirical factors that ailed sector FDI using statistical triangulation. The findings may help the country out of the FDI quagmire by influencing FDI policy.