An empirical analysis among foreign direct investment, trade openness and economic growth: evidence from the Indian economy

Kumari, Ranjana; Shabbir, Malik Shahzad; Saleem, Sharjeel; Khan, Ghulam Yahya; Abbasi, Bilal Ahmed; Bares, Lydia

doi:10.1108/sajbs-06-2020-0199

Cited by 59 publications

(25 citation statements)

References 81 publications

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“…International trade increases opportunities to invest in domestic countries encourage efficient distribution of resources, and increases productivity. Most significantly trade openness promotes technological expansion and spreads knowledge across economies (Adeleye et al, 2021;Fetahi-Vehapi et al, 2015;Kumari and Sharma, 2017;Kumari et al, 2021). Thus, we expect a positive relationship between TO and EG.…”

Section: Trade Openness (To)mentioning

confidence: 83%

ICT Influence on Economic Growth of Low-Income Countries with the Participation of HICs

Singh,

Kumari

2023

Preprint

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In this study, the effects of information and communication technology (ICT) on economic growth (EG) in low and high-income nations (LICs & HICs) are investigated. Using a comprehensive dataset spanning 2000–2019, including 30 LICs and 82 HICs, we employed regression models (OLS, FER, and system GMM) to analyze this relationship. Secure internet servers, individual internet users, fixed broadband subscriptions, and fixed telephone subscriptions are taken into the account of ICT indicators. Our findings demonstrate a positive association between ICT and EG for both LICs and HICs. This study focuses attention on the need for policymakers to bridge the "digital divide" and enhance access to ICT, particularly LICs, to leverage the potential of these technologies for sustainable economic development. This study provides insights for stakeholders’ interested in harnessing the transformative power of technology.

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Section: Trade Openness (To)mentioning

confidence: 83%

ICT Influence on Economic Growth of Low-Income Countries with the Participation of HICs

Singh,

Kumari

2023

Preprint

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“…, 2021). Kumari et al. (2021) found that there was a long term causal connection between FDI, trade openness and economic growth in India and FDI and trade openness influenced both ways.…”

Section: Literature Reviewmentioning

confidence: 98%

“…Impact of trade openness on environmental quality Trade openness has a connection and will influence FDI (Burange et al, 2019;Djulius, 2017;Makoni, 2018;Rakshit, 2022;Rathnayaka Mudiyanselage et al, 2021). Kumari et al (2021) found that there was a long term causal connection between FDI, trade openness and economic growth in India and FDI and trade openness influenced both ways.…”

Section: Literature Reviewmentioning

confidence: 99%

What are the factors that determine differing levels of environmental quality? Evidence from Java and other islands in Indonesia

Pujiati

Nurbaeti

Damayanti

2022

MEQ

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PurposeThis paper aims to identify variables that determine the differing levels of environmental quality on Java and other islands in Indonesia.Design/methodology/approachUsing a quantitative approach, secondary data were sourced from the Central Statistics Agency and the Ministry of Environment and Forestry. The data were obtained through the collection of documentation from 33 provinces in Indonesia. The analytical approach used was discriminant analysis. The research variables are Trade Openness, Foreign Direct Investment (FDI), industry, HDI and population growth.FindingsThe variables that distinguish between the levels of environmental quality in Indonesian provinces on the island of Java and on other islands are Industry, HDI, FDI and population growth. The openness variable is not a differentiating variable for environmental quality. The most powerful variable as a differentiator of environmental quality on Java Island and on other islands is the Industry variable.Research limitations/implicationsThis study has not classified the quality of the environment based on the Ministry of Environment and Forestry's categories, namely, the very good, good, quite good, poor, very poor and dangerous. For this reason, further research is needed using multiple discriminant analysis (MDA).Practical implicationsIndustry is the variable that most strongly distinguishes between levels of environmental quality on Java and other island, while the industrial sector is the largest contributor to gross regional domestic product (GDRP). Government policy to develop green technology is mandatory so that there is no trade-off between industry and environmental quality.Originality/valueThis study is able to identify the differentiating variables of environmental quality in two different groups, on Java and on the other islands of the Indonesian archipelago.

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“…The “compensation hypothesis,” related to trade openness, states that government spending is higher in open economies to mitigate against the jeopardy of being exposed to global markets and economic shocks. Some studies conducted in the Indian context to empirically examine the impact of trade openness have also yielded mixed results (Benarroch & Pandey, 2008, 2012; Chatterji, Mohan, & Dastidar, 2014; Dixit, 2014; Hye & Lau, 2014; Jani, Joshi, & Mehta, 2019; Joshi, Jani, & Mehta, 2022; Karras, 2003; Kumari et al. , 2021; Mallick, 2008).…”

Section: Literature Reviewmentioning

confidence: 99%

Impact of fiscal deficit and trade openness on current account deficit in India: new evidence on twin deficits hypothesis

Mehta

Mallikarjun

2023

ECON

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PurposeThis study aims to examine the impact of fiscal deficit, exchange rate and trade openness on current account deficit (CAD). The study tried to empirically investigate the ‘twin deficits hypothesis’ and ‘compensation hypothesis’ in the Indian context.Design/methodology/approachAutoregressive distributed lagARDL) bound test approach was used by taking annual time series data from 1978 to 2021. The estimates confirm a significant long-run and short-run relationship between dependent variables, i.e. CAD and independent variables such as the fiscal deficit, exchange rate and trade openness.FindingsThe results show that positive shocks of all explanatory variables significantly affect the CAD. CAD and fiscal deficit are significantly associated, as the coefficient of fiscal deficit is positive and significant. The study also found that exchange rate and trade openness significantly affect the CAD. The coefficients of exchange rate and trade openness are positive and significant. The findings show that an increase in CADs results from liberal trade policies that help domestic industries grow their trade and expansionary fiscal policy, leading to a higher fiscal deficit. The negative and significant error correction term suggests that short-run disequilibrium converges to long-run equilibrium at a speed of 19.2%. The findings validate the ‘twin deficits hypothesis’ and ‘compensation hypothesis’ in the Indian context.Practical implicationsIt can be inferred from the study that liberal policy to promote economic growth and trade openness should be designed and promoted judiciously. An excessive liberalised approach may impact other macroeconomic variables such as current account balances. Integrating the domestic market with global markets poses a big challenge for countries like India that aspire to penetrate global markets. Furthermore, the Indian policy makers should rigorously work and promote the policies such as Fiscal Responsibility and Budget Management (FRBM) as reduction in fiscal deficits, trade imbalances will also be reduced.Originality/valueThis study contributes to the existing literature on ‘twin deficit’ and trade openness by giving new evidence on the trilemma between designing sustainable fiscal policy by spending wisely without imperilling the country's global presence and CAD.

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An empirical analysis among foreign direct investment, trade openness and economic growth: evidence from the Indian economy

Cited by 59 publications

References 81 publications

ICT Influence on Economic Growth of Low-Income Countries with the Participation of HICs

ICT Influence on Economic Growth of Low-Income Countries with the Participation of HICs

What are the factors that determine differing levels of environmental quality? Evidence from Java and other islands in Indonesia

Impact of fiscal deficit and trade openness on current account deficit in India: new evidence on twin deficits hypothesis

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