 Exploring Dynamic Linkages Between Inward FDI and India’s Economic GrowthRakesh Shahani and Aayushi Jindal Journal of Business Research, 2019, vol. 8, issue 2, 109-117 Abstract: The present study attempts to develop a co-integrating relationship between foreign direct investment (FDI) net inflows into India and its economic growth for the calendar period 1986–2016 by taking log-transformed yearly data. The variables included in the study were per capita gross domestic product (GDP; as a measure of economic growth) and FDI net flows. Additional regressors as control variables include exports as a percentage of GDP (a proxy for trade openness) and call money rate (a proxy for financial variable). The methodology employed is autoregressive distributed lag (ARDL) bounds partial F -test. The results of the study show a positive co-integrating relation between FDI and GDP as given by computed F -value after controlling for other factors impacting growth. The long-run model also satisfied the necessary prerequisites of the model, such as variable stationarity, no serial correlation, and model stability. The lagged error correcting mechanism (ECM) was negative, stable, and significant; however, pace of adjustment was found to be at a slow rate of 7.6 percent per period (per annum). Keywords: Co-integration; ARDL bounds partial F-test; CUSUM; error correcting mechanism (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:sae:jjlobr:v:8:y:2019:i:2:p:109-117 Access Statistics for this article More articles in Jindal Journal of Business Research |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.