Are the Asian FDI Inflows Cointegrated with the Indian FDI Inflows? Empirical Research Findings

Rudra Prakash Pradhan

The IUP Journal of Financial Economics, 2007, vol. V, issue 1, 35-42

Abstract: The paper investigates the linkage of Foreign Direct Investment (FDI) inflows between India and four other Asian countries, viz., Japan, Hong Kong, Singapore and Malaysia. The empirical investigation follows annual data of FDI inflows during 1970-71 to 2004-05. The technique employed for the same is cointegration test, which is followed by the unit root test. The empirical results clarify that FDI inflows of four Asian countries along with India, have a unit root at the level data, but found to be stationary at the first difference level. The cointegration test finally confirmed that the FDI inflows of four Asian countries are cointegrated with India’s FDI inflows. The implication of this finding is that the FDI inflows of India can be used to predict the FDI inflows of Japan, Singapore, Hong Kong and Malaysia.

Date: 2007
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Persistent link: https://EconPapers.repec.org/RePEc:icf:icfjfe:v:05:y:2007:i:1:p:35-42

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