Foreign Direct Investment in India: Emerging Horizon

Vani Archana, N. C. Nayak and P. Basu
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Vani Archana: Indian Council for Research on International Economic Relations, New Delhi, India
N. C. Nayak: Department of Humanities and Social Sciences, Indian Institute of Technology, Kharagpur, India
P. Basu: Department of Humanities and Social Sciences, Indian Institute of Technology, Kharagpur, India

Indian Economic Review, 2007, vol. 42, issue 2, pages 225-266

Abstract: It is more than ten years India embarked on bold new policy on economic front. In these fourteen odd years there has been progress in both quantity and the way country attracted FDI. There has been a paradigm shift in the flow of FDI and consequent evolution of the country into a low cost, high-tech, R&D intensive behemoth which can not only sustain R&D-intensive industries but show significant growth in both quality and quantity. This paper intends to study this qualitative shift in the FDI inflow in India in-depth. It reveals that the country is not only cost-effective but also hot destination for R&D activities. Two models appropriate for the study have been made use of. While Panel Data model gives a holistic view, Seemingly Unrelated Regression (SUR) model gives a more detailed view of the changes taking place in the FDI space in India. Results are in conformity with changes taking place at ground level.

Keywords: Tax Intensity; Cost Intensity; R&D Intensity; Fixed Effect; Random Effects; Sur Model (search for similar items in EconPapers)
JEL-codes: F21 (search for similar items in EconPapers)
Date: 2007

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