Do fdi and public investment crowd in or crowd out private domestic investment in India

Badri Rath and Debi Prasad Bal ()
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Debi Prasad Bal: Indian Institute of Technology-Hyderabad, India

Journal of Developing Areas, 2014, vol. 48, issue 3, 269-284

Abstract: This paper examines the dynamic relationship between Private Domestic Investment (PDI), Foreign Direct Investment (FDI) and Public Investment (PU) in India for the period 1978-79 to 2009-10. Zivot and Andrews test has been used to know the structural break points in the data series. The empirical results derived from structural VAR model indicate that FDI has crowding in effects on PDI, whereas, PU neither Ôcrowd outÕ nor Ôcrowd inÕ PDI. Further, we found the evidence that shocks in PU and PDI have positively improved the FDI inflows in India.

Keywords: Investment; Crowding Out; Crowding in, Structural VAR; Zivot and Andrews Unit Root, India (search for similar items in EconPapers)
JEL-codes: C32 E22 E62 F21 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:jda:journl:vol.48:year:2014:issue3:pp:269-284

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