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Researcher of the Month; Dr. Caroline K – Determinants of Foreign Direct Investment

Dr. Caroline Wanjiru Kariuki is very enthusiastic about economics, a love that grew from reading The Economist while she was still in high school. This desire also saw her take an interest in watching economic news as well as picking the subject in her International Baccalaureate (IB) studies.

The 1st born in a family of three children, yearns to see change in Africa which she hopes will stem from discovering and analyzing how to improve the economy of the African continent.

For high schoo,l Dr. Caroline attended Imani School, before joining St. Mary’s school to undertake her IB. In 2004, Dr. Caroline went to Perth, Australia to study Economics and Financial Planning from Curtin University where she appeared on the Vice Chancellor’s List and graduated with Distinction. Still with the same university, Dr. Caroline studied a Master’s program in Accounting after which she worked for five years in the financial planning sector.

Later, Dr. Caroline decided to apply for a PhD as she seeked to have a change in her career. She successfully received a scholarship to undertake a PhD in Economics, in mid-2010, from Curtin University after applying to a couple of universities in Australia.

Dr. Caroline describes herself as an individual that is keen on learning, to fully understand her environment and what she does, so that she can do her best. She loves being excellent in every area and field she works in. As a result, although she had not thought of getting into the research field, when the PhD journey presented itself she did not shy away.


My research papers’ title is; The Determinants of Foreign Direct Investment to African Countries.

What factors influence foreign investments to African countries? Factors such as; political risk, economic risk, financial risk, the presence or absence of stock markets (countries such as Ethiopia do not have a stock market to date), commodity prices, openness to trade, performance of stock markets in developed countries (if stock markets in developed countries are performing well, does this provide an indication that African countries will receive more foreign investments from these countries?) are some of the areas I analyzed.


This was a relevant topic for me because I want to see change in Africa, and through such analysis we can also build the economy of our country and get better. I studied a panel of 35 countries using secondary data, looking at how different factors affect these countries.

What were your research findings?

  • Financial risks and political risks between 1984 and 2014, did not deter foreign investors from coming into Africa to invest. Even in the presence of political turmoil, some foreign investors may continue to invest in a country where they find that the natural resources offer benefits that outweigh the political risk.
  • Amount of foreign investments received in the past influences future investments to be received.
  • The performance of the Commodity Price Index was found to play a positive and significant role in influencing Foreign Direct Investment (FDI) flows into African nations.
  • The performance of the stock markets in developed countries was found to have a positive, significant relationship with the FDI flows received by African countries. The availability of a stock market in an African country was also found to have a positive influence on FDI inflows into the country. 

What are the benefits of this research…?

  • Policy makers can fully understand some of the factors that influence investments’ into a country, is it about how the country is performing economically, politically etc. Depending on what the investor is after, some factors may not deter them to continue. Angola is a good example, despite the country’s political issues, investors still entered the country to extract the resources they were after.
  • For investors interested in Africa, they now have a chance to find out more to help with their decision making.

What Challenges did you face while conducting research?

  • Finding data for a lot of African countries was only on annual basis which was challenging, when in need of more data. Some countries do not have online data which makes finding information more difficult.
  • Most countries have fairly young stock markets, only about six countries have older markets, therefore it was challenging to get more information on the countries with young stock markets.
  • 1 year into my PhD I moved back to Kenya for good as I felt I wanted to be back home and finish my work from here. This proved to be difficult because I couldn’t interact with my supervisor Prof. John Simpson as much as I wanted to. So when I went to Australia to see him for a few weeks, I ended up staying until I finished.
  • I ended up spending a lot of time alone to work on my PhD which was sometimes lonely, but I had to do it.

How did you balance studying and every other commitment you had?

PhD mostly comes at a time when you have commitments; your peers are busy with marriage life, doing businesses etc. so there are many issues that may make this journey even more challenging.


I deliberately chose to have a lot of alone time to figure out my thesis and try to make it readable. I felt that I needed to make my paper enjoyable for the person who will read it, so that they can have motivation when reading. One examiner said my paper was very well written, and it was great accomplishment.

What drives you to achieve success?

My desire is to bring out the best in everyone I meet, being ready to give out my best to Kenya.  For example I always believe when my students are better and do better, they will help shape the country better.

How did you get into teaching?

I think when you finish a PhD the normal route is to get into academia and also my desire to impact people made this decision easier; to shape people to be better.


I had also taught a bit while in Australia where I tutored economics at Curtin and Edith Cowan University; this experience made me seek teaching options in Kenya. My family encouraged me to apply to Strathmore which I did and I was blessed to get a job.


I am discovering that teaching is actually rewarding.


Dr. Caroline lectures in Microeconomics, Macroeconomics, Seminars in Financial Economics, Money and Banking under the School of Finance and Applied Economics.

Advice to PhD students especially those interested in doing Economics

It is key to choose a topic one is interested in because when in the middle of this program, you need that motivation to push you on when things seem tough.


For those who have already started, try and do something related to your topic every day.


Always believe you can achieve the best, despite any challenges, or opinions from others on either the topic you are working on or the research methodology etc.


Finishing a PhD is a matter of your own drive and you should have faith that you will finish your thesis. 

What do you do in your spare time?

I like taking nature walks especially at Karura forest. I also love watching a good movie, or listening to music.

I have some great love for the beach, as well as watching economic news.