Open Access
Subscription Access
Open Access
Subscription Access
Does Foreign Direct Investment Effect over Export Growth in Long Run in India:A Co-Integration Analysis
Subscribe/Renew Journal
Export growth in domestic country is associated with several factors including foreign direct investment that significantly contributes in faster export promotion. Since 1991, the New Economic Policies (NEPs) fetched the uninterrupted foreign investment to India than before. Within this framework, this paper is prepared to measure the effect of FDI inflow over export promotion. Using annual data series from 1991-2012, we investigate the effect of FDI over export growth in India with employing co-integration statics. Results support the Export increases in many folds in long run when FDI comes. However, the causality test reports, there is bi-directional relation which suggest both export and foreign direct investment are motivator factor to each other variable.
Keywords
Bi-Directional Relation, Causality Test, Cointegration Statics, Export Growth, Foreign Investment.
User
Subscription
Login to verify subscription
Font Size
Information
- P. Agrawal, “Economic impact of foreign direct investment in South Asia,” Working Paper, Indra Gandhi Institute of Development Research, India, 2000.
- L. Alfaro, C. Areedan, K.-O. Sebnem, and S. Selin, “FDI and economic growth: The role of local financial markets,” Journal of International Economics, vol. 64, no.1, pp. 89-112, January 2003.
- A. Saini, P. Madan, and K. Batra, “Impact of FDI in-flow on economic growth of SAARC economies,”International Journal of Engineering, Business and Enterprise Applications, vol. 12, no. 2, pp. 161-166, March-May 2015.
- E. Asiedu, “On the determinants of foreign direct investment to developing countries: Is Africa different?,” World Development, vol. 30, no. 1 pp. 107-119, January 2002.
- R. J. Barro, “Economic growth in a cross section of countries,” The Quarterly Journal of Economics, vol. 106, no. 2, pp. 407-443, May 1991.
- E. Borensztein, J. D. Gregorio, and J.-W. Lee, “How does foreign direct investment affect growth?,” Journal of International Economics, vol. 45, no.1, pp. 115-135, June 1998.
- K. Carstensen, and F. Toubal, “Foreign direct investment in central and eastern European countries: A dynamic panel analysis,” Journal of Comparative Economics, vol. 32, no.1, pp. 3-22, March 2004.
- P. Dua, and A. I. Rasheed, “Foreign direct investment and economic activity in India,” Indian Economic Review, vol. 33, no.2, pp.153-168, July-December 1998.
- J. H. Dunning, “Explaining changing patterns of international production: In defence of the Eclectic theory,” Oxford Bulletin of Economics and Statistics, vol. 41, no.4, pp. 269-295, November 1979.
- C. W. J. Granger, “Some properties of time series data and their use in econometric model specification,” Journal of Econometrics, vol. 16, no.1, pp. 121-130, May 1981.
- S. Hymer, “International politics and international economics: A radical approach,” Monthly Review Archives, vol. 29, no. 10, pp. 15-35, March 1978.
- L. Alfaro, “Foreign direct investment and growth: Does the sector matter?,” Working Paper, Harvard Business School, April 2003.
- S. Johansen, “Statistical analysis of cointegration vectors,” Journal of Economic Dynamics and Control, vol. 12, no. 2-3, pp. 231-254, June-September 1988.
- S. Johansen, and K. Juselius, “Some structural hypotheses in a multivariate co integration analysis of the purchasing power parity and the uncovered interest parity for UK,” EconPapers, pp. 90-105, University of Copenhagen, 1990.
- R. E. B. Lucas, “On the determinants of direct foreign investment: Evidence from east and southeast Asia,” World Development, vol. 21, no. 3, pp. 391-406, March 1993.
- F. Noorbakhsh, A. Paloni, and A. Youssef, “Human capital and FDI inflows to developing countries: New empirical evidence,” World Development, vol. 29, no. 9, pp. 1593-1610, 2001.
- R. P. Pradhan, “Globalisation in India: With special reference to 1990s,” Journal of Economics and International Finance, vol. 2, no. 5, pp. 76-84, May 2010.
- B. Quattara, “Modeling the long run determinants of private investment in Senegal,” CREDIT Research Paper, No. 04/05, Centre for Research in Economic Development and International Trade, University of Nottingham, UK, 2005.
- K. S. C. Rao, and B. Dhar, “India’s FDI inflows: Trends and concept,” Institute for Studies in Industrial Development Working Paper Series, 2011.
- P. Sahoo, “Foreign direct investment in South Asia: Policy, trends, impact and determinants,” ADB Institute Discussion, Paper No. 56, Asian Development Bank, Manila, November 2006.
- H. R. Seddighi, K. A. Lawler, and A. V. Katos, Econometrics: A Practical Approach, London, Routledge, 2000.
- H. Singh, and W. J. Kwang, “Some new evidence on determinants of foreign direct investment in developing countries,” World Bank Policy Research, Working Papers 1531, Washington, D.C., 1995.
- R. M. Solow, “A contribution to the theory of economic growth,” The Quarterly Journal of Economics, vol. 70, no. 1, pp. 65-94, February 1956.
- T. N. Srinivasan, “India’s export performance: A comparative analysis,” in I. J. Ahluwalia, and I. M. D. Little (eds.), India’s Economic Reforms and Development, Oxford University Press, 1998.
- UNCTAD, World Investment Report 2002. Available: http://www.unctad.org/fdistatistics/www.unctad.org/wir
- UNCTAD, World Investment Report 2012. Available: http://www.unctad.org/fdistatistics/www.unctad.org/wir
- J.-Y. Wu, and C.-C. Hsu, “Does foreign direct investment promote economic growth? Evidence from a threshold regression analysis,” Economics Bulletin, vol. 15, no. 12, pp. 1-9, 2008.
Abstract Views: 208
PDF Views: 5