Determinants of FDI and competitive federalism in India

Prashant I. Vadikar and Hardik B. Bhadeshiya

International Journal of Business and Globalisation, 2025, vol. 41, issue 1, 75-89

Abstract: The state's attempts to draw FDI are critical if India is to see rapid economic growth. States are working to improve governance as a result of the competitive and collaborative federalism strategy that New India has taken to attain its goals. Panel data regression has been employed in the study to objectively evaluate the influence of socio-economic and political variables on FDI. The results demonstrate that, in the short term, the economy's digitalisation is the most critical element in luring FDI inflow for States and UTs. Only e-readiness or digitalisation has an immediate impact on FDI inflow since other resources are mobile between states and are manageable. Business ease is immediately impacted by digitalisation. The states should work to improve the digital infrastructure, digital literacy and e-governance.

Keywords: foreign direct investment; FDI; competitive federalism; India; states. (search for similar items in EconPapers)
Date: 2025
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