FDI Inflows in India:Trends and Determinants

Authors

  •   Dipon Ghosh Assistant Professor, Department of Economics, Rabindra Sadan Girls College, Main Road, P.O & District- Karimganj, Assam - 788 710

DOI:

https://doi.org/10.17010/aijer/2015/v4i6/84914

Keywords:

FDI

, Trend, Determinant, OLS

JEL Classification

, F21, F23, F32

Paper Submission Date

, April 15, 2015, Paper sent back for Revision, July 6, Paper Acceptance Date, October 2, 2015.

Abstract

The paper analyzed the sector and country wise trend of foreign direct investment (FDI) inflows in India from 1991-92 to 2012-13. The paper found negative trends in sectors such as electrical equipment, transportation, chemicals, food processing and positive trend in the metallurgical and service sector. The paper also investigated the determinants of FDI inflows in India since 1980-81. The study was conducted taking data from various secondary sources. The study used OLS method to estimate various parameters of the determinants of FDI inflows. The paper found that lagged FDI inflow (one period), inflation rate, share of manufacturing sector in GDP, interest rate, per capita income were significant determinants of FDI inflows in India (except occurrence of riots). The variables taken showed expected signs, including the occurrence of riots. The paper included one dummy variable since 1991 to examine the impact of liberalization policy on FDI inflows and found that the variable was significant. This means that liberalization of the economy has increased FDI inflows in India.

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Published

2015-12-01

How to Cite

Ghosh, D. (2015). FDI Inflows in India:Trends and Determinants. Arthshastra Indian Journal of Economics & Research, 4(6), 24–33. https://doi.org/10.17010/aijer/2015/v4i6/84914

Issue

Volume 4 , Issue 6 , November-December 2015

Section

International Economics and Trade
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