Who really controls Zambia’s mining wealth? Stakeholder influence on inward Foreign Direct Investment
DOI:
https://doi.org/10.37075/FABA.2025.2.01Keywords:
Foreign Direct Investment, Mining Sector, Stakeholder Influence, Corporate Social Responsibility, Resource DependenceAbstract
Purpose: This study examines the influence of key stakeholders including the Zambian government, local communities, multinational enterprises (MNEs), and foreign investors on inward Foreign Direct Investment (FDI) in Zambia's mining sector. It seeks to understand how stakeholder dynamics shape investment decisions and sustainability outcomes in this resource-dependent economy.
Design/Methodology/Approach: A mixed-methods approach with a convergent parallel design is employed, integrating quantitative and qualitative data. An Autoregressive Distributed Lag (ARDL) model assesses long-term and short-term relationships between Stakeholders’ influence and FDI trends, while historical data, policy shifts, corporate social responsibility (CSR) practices, investor perceptions and local economic linkages provide contextual insights.
Findings: The findings reveal that Stakeholders’ influence exert significant influence on FDI through measures such as CSR expectations and policy shifts and yet disparities in benefit-sharing persist. Foreign investors, especially from China, drive capital inflows but often with limited local economic spill overs. Moreover, policy stability, particularly in taxation and regulatory frameworks, is critical for attracting FDI, with recent reforms showing positive effects. However, Zambia's heavy reliance on mining FDI perpetuates vulnerability to commodity price fluctuations.
Practical Implications: The study recommends policy measures to enhance regulatory consistency, promote value addition in mining, and diversify into agriculture and renewable energy. Strengthening local content policies and fostering multi-stakeholder dialogue are essential to ensure FDI contributes to inclusive growth. MNEs should align CSR strategies with community development needs to secure social license to operate.
Originality/Value: This study contributes to the literature by providing a comprehensive stakeholder analysis of FDI in Zambia's mining sector, bridging gaps between policy, corporate practice, and community impacts. Unlike previous studies focusing solely on macroeconomic factors, this research highlights the interplay between governance, investor behaviour and local development, offering nuanced insights for policymakers and investors in resource dependent economies.
Paper Type: Research Paper
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