FDI inflow and Economic Growth in India An Empirical Analysis

Bagli, Supravat; Adhikary, Manikal

doi:10.5958/j.0976-4666.59.1.003

Cited by 14 publications

(10 citation statements)

References 13 publications

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“…Some other examples of such studies are: Alam (2000) for Bangladesh; Akinlo (2004) and Ayanwale (2007) for Nigeria; Duasa (2007) for Malaysia and Pradhan (2002), Bhat et al (2004) for India. Bagli and Adhikary (2014) in a very latest study on India also revealed that growth of FDI inflow is immaterial in the determination of the economic growth in India.…”

Section: Study Of Brics Nationsmentioning

confidence: 99%

Causal nexus between foreign direct investment and economic growth

Gupta

Singh

2016

Journal of Advances in Management Research

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Purpose – The purpose of this paper is to determine cause and effect relationship between foreign direct investment (FDI) and economic growth (gross domestic product (GDP) taken as proxy) for Brazil, Russia, India, China and South Africa (BRICS nations) individually for the period 1992-2013. Also, the study tries to explore the reasons behind the linkage between FDI and GDP by estimating a linear regression model consisting of both macro-economic and institutional variables. Design/methodology/approach – Johansen cointegration technique followed by vector error correction model (VECM) and standard Granger causality test are employed to investigate the causal linkage between FDI and GDP. To delve into the reasons behind this linkage, an ordinary least square (OLS) technique is also applied to test the linear regression model consisting of net FDI inflows as dependent variable and nine macro- economic and institutional variables. Residual diagnostics is also conducted using Breusch-Godfrey Lagrange Multiplier test for diagnosing the problem of serial correlation, Breusch-Pagan-Godfrey test for examining heteroskedasticity and Jarque Bera test for verifying the normality of residuals. Findings – The Johansen cointegration result establishes a single cointegrating vector (long run relationship) between FDI and GDP for India, China and Brazil. After proving a cointegration, VECM results revealed that there exists unidirectional long run causality running from GDP to FDI in case of Brazil, India and China. Also, it is confirmed that there exists short run causality between FDI and GDP in China, i.e. the past lags of FDI jointly impact the value of GDP. However, for Russia and South Africa, where there is no cointegration in the long run, standard Granger causality test is conducted which reveals that in both the nations, FDI and GDP are independent of one another. The results of OLS technique reveal different country-specific factors causing this linkage between FDI inflows and economic growth. Originality/value – Various researchers in the past have examined this issue of linkage between FDI and GDP in the context of various developing or developed nations. This reveals a gap in the existing literature pertaining to this causal linkage in the context of the BRICS. Thus, this study fills this gap by analyzing not just this causal nexus with the help of VECM and Granger causality techniques but also tries to explore further the reasons for such strong/weak/no link with the help of fitting a regression model which comprises of both macro-economic and institutional country-specific variables influencing this causation.

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Section: Study Of Brics Nationsmentioning

confidence: 99%

Causal nexus between foreign direct investment and economic growth

Gupta

Singh

2016

Journal of Advances in Management Research

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“…Lincényi and Čársky (2020) emphasized importance of trust in public policy. However, Bagli and Adhikary (2014) argued that one of the factors that also face economic growth is population growth. Therefore, past works were reviewed with consideration on few macroeconomic factors on economic growth that are necessary in this study.…”

Section: Literature Reviewmentioning

confidence: 99%

The contribution of macroeconomic factors in determining the economic growth, export and the agricultural output in agri-based ASEAN economies

Chetthamrongchai¹,

Somjai²,

Chankoson³

2020

JESI

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The prime objective of the study can be looked at from the theoretical and practical perspectives thereby predicated on the researcher's strong will to contribute to the body of knowledge by analyzing the economic impact of government spending on agriculture, unemployment rate, and crude oil price in the context of agriculture sector of non-oil for economic growth. Moreover, with the aims to bridge the literature gap in the knowledge of macroeconomic factors on the agriculture in Thailand; since the non-oil export has the potential of growth in terms of sales, profitability, rate of earnings and productivity if the factors militating against the non-oil exports are addressed. The ARDL method is employed to answer the research questions. The findings of the study ha highlight the fact that the this is not only to increase the agricultural sector's contribution to GDP but can also help to cushion the effect of price shocks in the international oil (crude oil) market and promote non-oil export. In addition, to improve the outlook of other non-oil sectors such as the manufacturing sector where agricultural outputs are being required. Thus, important macroeconomic factors like the interest rate, agricultural land, unemployment rate, agricultural export, crude oil price, inflation rate, government spending, openness and exchange rate will be considered in the study.

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“…Using dynamic ordinary least square, their finding shows that foreign direct investment has a positive and significant impact on economic growth of southern african customs union countries. Bagli and Adhikary (2014) find that five most developed Asian countries have reported a positive impact of foreign direct investment on economic growth and it is as a result of opening their economies and improving the environment for investment of foreign investors. Stylianou (2014) figures that if we analyze foreign direct investment in developed countries (like USA), we can understand that the main determinant in economic growth, whether in short or long term, is a perfect relationship between foreign direct investment and U.S. exports.…”

Section: Introductionmentioning

confidence: 96%

“…These differences fall into three categories: The first difference is that some scholars only focus on the impact of foreign direct investment on economic growth such as Bagli and Adhikary (2014), El-Wassal and Amal (2012), Katircioglu (2009) andLiu (2009). The second difference is that a number of experts mainly pay attention to the impact of employment on economic growth such as Li and Xu (2017), Wang (2017) and Ge (2010).…”

Section: Introductionmentioning

confidence: 99%

Foreign Direct Investment, Economic Growth and Employment: Evidence from China

Ying¹

2018

IREF

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This paper applies the annual data series from 1983 to 2016 and introduces an employment variable to analyze the interaction among foreign direct investment, economic growth and employment. Three variables are used to conduct an empirical analysis under the VAR model. Via the analysis of Augmented Dickey-Fuller test, Granger causality test, impulse response function and variance decomposition, the results show that the foreign direct investment has a positive effect on economic growth and employment, and the economic growth has a positive effect on employment. The employment and economic growth exist bidirectional causality. Meanwhile, the foreign direct investment can also result in an increase in the employment. More importantly, this paper provides some ideas for China's government to settle some social problems such as employment and economic growth. Specifically, at present, China's government still should encourage foreign investors to invest in China because it can be beneficial to employment and economic growth in China. Of course, the structure of employment also should be optimized so as to keep high speed economic growth. Simultaneously, the high speed economic growth can improve the employment in China.

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FDI inflow and Economic Growth in India An Empirical Analysis

Cited by 14 publications

References 13 publications

Causal nexus between foreign direct investment and economic growth

Causal nexus between foreign direct investment and economic growth

The contribution of macroeconomic factors in determining the economic growth, export and the agricultural output in agri-based ASEAN economies

Foreign Direct Investment, Economic Growth and Employment: Evidence from China

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