FDI, services trade and economic growth in India: empirical evidence on causal links

Economic Globalization and Economic Performance Dynamics: Some New Empirical Evidence from Nigeria

“…The parameter estimate of FDI is statistically significant at 0.01 level with a long-run elasticity of 1.098 that is, for every 1% increase in FDI, Nigerian economic performance grows by approximately 1.10%. This result is akin to the findings of some authors (Bhattacharya and Bhattacharya, 2011;Ahmad et al, 2012;Dash and Parida, 2013) on FDI-led growth hypothesis in developing economies. Arguably, the long-run positive relationship that emanates from FDI into Nigeria's economic performance can be attributed to the substantial presence of multinational corporations (MNCs) in the most critical prime sector -oil and gas sector of the country's economy.…”

Trade in Services-Economic Growth Nexus: An Analysis of the Growth Impact of Trade in Services in SADC Countries

“…Causality results indicate the presence of bi-directional causal relationship between FDI and economic output as well as between service exports and economic output. The results by Dash and Parida (2013) also bring out feedback relationship between service exports and FDI, reconfirming the presence of complementary relationship between the two. Sang-Chul (2017) examined, "using country-level panel data and System Generalized Method of Moments technique, the nexus between trade openness and growth.…”

“…Since then, Jung (1986) and Odedokun (1991) have found that "the depth and growth of financial markets had a significant effect on growth in developing countries." Dash and Parida (2013) examine the linkages between inward FDI, services trade and economic output using co-integration and VECM causality test. The empirical findings confirm the long-run relationship among these variables.…”

Does FDI Really Matter to Economic Growth in India?

“…However, despite increasing flows of FDI especially in recent years, the FDI-growth nexus in India has not yet been intensively investigated. To the best of our knowledge, only a handful of studies to date-such as Pradhan (2002); Chakraborty and Basu (2002); Sahoo and Mathiyazhagan (2003); Agrawal (2005); Chakraborty and Nunnenkamp (2008); Agrawal and Khan (2011);and Dash and Parida (2013)-have attempted to tackle the issue and have provided mixed conclusions. For example, Pradhan (2002) employs a production function analysis to analyze the effect of inward FDI on economic growth in India; he finds that FDI does not have significant positive growth impacts.…”

“…On the other hand, Chakraborty and Nunnenkamp (2008) use a panel cointegration method to explore the dynamic relationship between FDI and economic growth; they find that the influx of FDI contributes to economic growth for the Indian economy. Dash and Parida (2013) utilize a vector error-correction (VEC) model in examining the issue; they report in passing a beneficial effect of FDI on growth, after controlling for trade. Notably, these studies have concentrated mostly on whether the inflows of FDI to India have had any significant effects on the level and/or growth rate of gross domestic product (GDP) (as a proxy for economic growth).…”