ANVESHAK-International Journal of Management

Open Access Open Access  Restricted Access Subscription Access
Open Access Open Access Open Access  Restricted Access Restricted Access Subscription Access

Distribution of Foreign Direct Investment in Indian Regions: A Trend Analysis


Affiliations
1 Ravenshaw University, Cuttack, Odisha, India
2 Gopabandhu Academy of Administration, Bhubaneswar, Odisha, India
3 Post Graduate Department of Management, Ravenshaw University, Cuttack, Odisha, India
     

   Subscribe/Renew Journal


Concentration of FDI in a few selected states reflects the location preference of the foreign investors to do business in India. States like Tamilnadu, Maharashtra, Karnataka and New Delhi are getting a significantly higher FDI than the rest of India. The concentration of FDI in these states is an old affair and they compete among themselves to be investors' preferred regions in future. This paper takes an attempt to find the volatility in the FDI inflow and the trend of FDI inflow to the Indian states and then to forecast the FDI inflow to these regions.

The results show that the FDI inflow among the Indian regions do not have identical volatility and trend and there is a significant difference in the volatility of FDI inflow during pre-recession and post-recession period of the Indian economy. The region with high volatility in the pre-recession period can't continue to maintain as a preferred location during the post-recession period. Whereas the region with a low volatility in the pre-recession period is able to collect a higher FDI in the post-recession period and thus promoted to a higher rank. Similarly, regions like Mumbai, New Delhi are projected to lose share of FDI in the country where as Bangalore, Chennai and Ahmedabad may get a higher share of FDI inflow.


Keywords

Foreign Direct Investment, Concentration Ratio, Per capita State FDI, Coefficient of Variance & Per capita State GDP.
Subscription Login to verify subscription
User
Notifications
Font Size


  • Ahluwalia, Montek (2001), “State Level Performance under Economic Reforms in India”, Center for Research on Economic Development and Policy Reform, Working Paper No. 96, March, p. 71.

  • Billington, N. (1999), “The Location of Foreign Direct Investment: An Empirical Analysis”, Applied Economics, Vol. 31, pp. 65–76.

  • Chakraborty, C. and Nunnenkamp, P. (2008), “Economic Reforms, FDI and Economic Growth in India: A Sector Level Analysis,” World Development, Vol. 36(7), pp. 1192–1212.

  • Cheng, L and Kwan, Y. (2000), “What are the Determinants of the Location of Foreign Direct Investment? The Chinese Experience”, Journal of International Economics. Vol. 51, pp. 379–400.

  • Driscoll, M.A. and Paliwoda, S.J. (1997), “Dimensionalizing International Market Entry Mode Choice”, Journal of Marketing Management, Vol. 13, pp. 57–87.

  • Head, T.C. and Sorensen, P.F. (2005), “Attracting Foreign Direct Investment: The Potential Role of National Culture”, The Journal of American Academy of Business, Vol. 6(1), pp. 305–308.

  • Kravis, I.B. and Lipsey, R. (1982), “Location of Overseas Production and Production for Exports by US Multinational Firms”, Journal of International Economics, Vol. 12, pp. 201–223.

  • Kwang, J. and Singh, H. (1996), “The Determinants of Foreign Direct Investment in Developing Countries”, Transnational Corporations, Vol. 5(2), pp. 67–105.

  • Wheeler, D. and Mody, A. (1992), “International Investment Location Decisions: The case of U.S. firms”, Journal of International Economics, Vol. 33, pp. 57–76.

  • Yakhou, M. and Dorweiler, V.P. (2006), “Business international: An analysis of the International Market”, The journal of American Academy of Business, Vol. 8(2), pp. 186–189

  • Davis, D. and Weinstein, D. (1999), “Economic Geography and Regional Production Structure: An Empirical Investigation”, European Economic Review, Vol. 43, pp. 379–407.

  • Davis, D. and Weinstein, D. (2003), “Market access, Economic Geography and Comparative Advantage: An Empirical Test”, Journal of International Economics, Vol. 59, pp. 1–23.

  • Coughlin, Cletus C., Joseph, V. Terza and Vachira, Aromdee (1989), “State Characteristics and the Location of Foreign Investment within the United States: Minimum Chi-Square Conditional Logit Estimation”, Federal Reserve Bank of St. Louis Working Paper No.1987-006B

  • Fisher, Peter S. and Alan, H. Peters (1998), “Industrial Incentives: Competition among American States and Cities”, W.E.U Pjohn Institute for Employment Research, Employment Research B. Fall 1998.

  • Nunnenkamp, Peter, Megha, Mukim (2012), “The Clustering of FDI in India: The Importance of Peer Effects”, Applied Economics Letters, Vol. 19, No. 8.

  • Fact Sheet on Foreign Direct Investment (FDI), SIA Newsletters & Reports (From 2004 to 2013), DIPP, Government of India.; www.dipp.nic.in

  • UNCTAD (2014), World Investment Report.


Abstract Views: 511

PDF Views: 1




  • Distribution of Foreign Direct Investment in Indian Regions: A Trend Analysis

Abstract Views: 511  |  PDF Views: 1

Authors

Tushar Ranjan Panigrahi
Ravenshaw University, Cuttack, Odisha, India
Rabi Narayan Patra
Gopabandhu Academy of Administration, Bhubaneswar, Odisha, India
Sanjay Kumar Satapathy
Post Graduate Department of Management, Ravenshaw University, Cuttack, Odisha, India

Abstract


Concentration of FDI in a few selected states reflects the location preference of the foreign investors to do business in India. States like Tamilnadu, Maharashtra, Karnataka and New Delhi are getting a significantly higher FDI than the rest of India. The concentration of FDI in these states is an old affair and they compete among themselves to be investors' preferred regions in future. This paper takes an attempt to find the volatility in the FDI inflow and the trend of FDI inflow to the Indian states and then to forecast the FDI inflow to these regions.

The results show that the FDI inflow among the Indian regions do not have identical volatility and trend and there is a significant difference in the volatility of FDI inflow during pre-recession and post-recession period of the Indian economy. The region with high volatility in the pre-recession period can't continue to maintain as a preferred location during the post-recession period. Whereas the region with a low volatility in the pre-recession period is able to collect a higher FDI in the post-recession period and thus promoted to a higher rank. Similarly, regions like Mumbai, New Delhi are projected to lose share of FDI in the country where as Bangalore, Chennai and Ahmedabad may get a higher share of FDI inflow.


Keywords


Foreign Direct Investment, Concentration Ratio, Per capita State FDI, Coefficient of Variance & Per capita State GDP.

References





DOI: https://doi.org/10.15410/aijm%2F2015%2Fv4i2%2F67726