Determinants of Foreign Direct Investment: Empirical evidence from India

  • shamurailatpam sofia devi M S University of Baroda
  • shamurailatpam sofia devi M S University of Baroda
Keywords: Exchange rate, Foreign Direct Investment, market size, total reserves.

Abstract

Abstract: India received, over the past two decades substantial amount of Foreign Direct Investment (FDI) inflows. The purpose of this study is to empirically investigate the determinants of FDI inflows in India using time series data for the period 2001-02 to 2011-12. In the analysis, FDI inflows are modeled as a function of market size, total reserves, degree of openness for the host country, exchange rate and lastly expenditure of the central government on economic and social activities. The empirical study observed that market size and availability of foreign exchange reserves are the two main factors that determine the inflow of FDI over the study period. Despite the theoretically expected sign, estimated coefficient of the variable exchange rate bears a positive sign. And variables like Openness and the expenditure of the central government on social and economic activities do not explained the inflow of FDI during the period.Keywords: Exchange rate, Foreign Direct Investment, market size, total reserves.  

Author Biographies

shamurailatpam sofia devi, M S University of Baroda
Department of Economics faculty of arts, M S university of baroda, vadodara gujarat INDIA 390002
shamurailatpam sofia devi, M S University of Baroda
Department of Economics, Faculty of Arts. M S university of Baroda Vadodara Gujarat india 3900Det02

References

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Published
27-03-2014
How to Cite
devi, shamurailatpam, & devi, shamurailatpam. (2014). Determinants of Foreign Direct Investment: Empirical evidence from India. Journal of Global Economy, 10(1), 16-23. Retrieved from http://www.rcssindia.org/jge/index.php/jge/article/view/312
Section
Articles