Foreign Direct Investment (FDI) dynamics in India: what do ARIMA models tell us?

Thabani Nyoni and Lovemore Muchingami

MPRA Paper from University Library of Munich, Germany

Abstract: Using annual time series data on net FDI inflows in India from 1960 to 2017, the study examines net FDI inflows using the Box – Jenkins ARIMA methodology. The ADF tests reflect that India FDI net FDI inflows data is I (1). Based on the AIC, the study presents the ARIMA (1, 1, 0) model. The diagnostic tests further show that the presented parsimonious model is not only stable but also suitable for explaining net FDI dynamics in India. The results of the study indicate that, net FDI inflows in India are likely to weaken over the next 10 years. The study identifies two (2) significant policy recommendations in an effort to aid policy makers on how to promote and stimulate the much expected net FDI inflows in India.

Keywords: Foreign direct investment; forecasting; India (search for similar items in EconPapers)
JEL-codes: C53 E27 F21 (search for similar items in EconPapers)
Date: 2019-05-06
New Economics Papers: this item is included in nep-int and nep-mac
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