Determinants of Investment Activities: In Jimma Town, Oromia Regional State

Abstract

Investment activity plays a crucial role in the economic growth of a country. Economic literatures show that investment is, both empirically and theoretically, the key determinant to economic growth. Economic growth refers to an increase in a country’s production or income per capita. The general objective of the study was to determine the determinants of Investment activities in case of Jimma Town. The study used mixed research approach and adopted a descriptive research designs with the target population of 306 of investors engaged in the investment in the study area. The study used both probability sampling (simple random sampling) and nonprobability sampling (Purposive sampling). For this study both primary and secondary data were used. To check the reliability of this theoretical and empirical review the researcher collected data from 173 respondents and analyzed by using SPSS 23 Version accordingly based upon five variables (Economic factor, Socio-cultural factor, Political factor, Environmental and Financial factor, factor). In this research the both descriptive and inferential analysis was employed. Based on the analysis made of this study the finding of this study was identified. The research was investigated the major determinants of investment activities in the study area and indicates the direction for investment how to deal with those determinants. Some of the main findings of the study were difficulties of finance and lack of credits when they started their business, and low encouragement from the investment offices are the major findings of this study. Finally, investment related problem is not the responsibility of the government alone, but also all investors, the local community, the private business man of the study area has to work together with the government so as to accomplish the anticipated or to mitigate objectives.