Relationship between FDI Inflows and Exports at Subnational / State Level: A Case Study on the Indian Economy

Gurpriya Sadana () and Jaydeep Mukherjee ()
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Gurpriya Sadana: Indian Institute of Foreign Trade (IIFT), Delhi, India
Jaydeep Mukherjee: Department of Commerce, Ministry of Commerce and Industry

No 2470, Working Papers from Indian Institute of Foreign Trade

Abstract: The study examines the relationship between exports and FDI inflows at the subnational /state level for the Indian economy from 2011-2020. The study employs panel random effect regression and found that GSDP, infrastructure index, financial deve lopment index and state policy variable representing distinct export promotion policies pursued by the states are significant determinants of exports at the state level. However, a substitutable relationship has been established between FDI inflows and exports at the state level, suggesting that FDI is market-seeking and does not contribute to improved export performance by the states.

Keywords: Subnational Exports; Spatial factors; Panel Data; India (search for similar items in EconPapers)
JEL-codes: F10 O53 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2024
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