Foreign direct investment and institutions: A case of Indian firms

Saikia, Munmi

doi:10.1080/09638199.2021.1894217

Cited by 8 publications

(5 citation statements)

References 25 publications

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“…The empirical findings show a positive correlation between the ability of the government to manage corruption, the standard of its legislation, the degree of voice and accountability, and the attraction of FDI to African nations [13]. Another study investigated the impact of institutions on foreign direct investment locale preferences in India using a novel data set on two-sided FDI [14]. That study supports other studies by asserting that institutions and FDI have a beneficial relationship.…”

Section: Literature Reviewsupporting

confidence: 67%

The Impact of Institutional Quality on Sectoral Foreign Direct Investment in Pakistan: A Dynamic Simulated ARDL Approach

Khan

et al. 2023

Sustainability

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Capital is needed to accelerate the development process, but developing nations struggle with minimum resources. Since foreign direct investment (FDI) is essential to solve the funding shortage, developing nations make every effort to attract FDI to their countries. This study was conducted to explore the impact of institutional quality on sectoral FDI in Pakistan using time series data for the period from 1986 to 2019. To create a solid foundation for policy formulation, this study developed a single measure of institutional quality by utilizing a wide range of institutional indicators. It evaluates the impact of overall institution quality on sector-level FDI and examines the causal relationship between institutions and sectoral FDI with a clear focus on a single-country analysis. The dynamic simulated autoregressive distributed lag technique was employed to explore the impact of institutional quality and other factors on FDI. The results of the study explained that institutional quality and TO have a positive and significant effect on the FDI of the primary FDI sector at 5%, while in the case of the secondary sector, the effect of institutional quality, HDI and GDP on FDI inflow is significant at 10% and TO has a significant effect on secondary sector FDI at 5%. In addition, institutional quality and GDP have a positive relationship with tertiary sector FDI at 5%. The empirical findings show that higher institutional quality in emerging economies such as Pakistan encourages large transfers of technological advances through FDI, increasing the overall performance of the economy. This study found that institutional quality significantly increases sectoral FDI in Pakistan. Finally, this study prescribes some policy measures to increase FDI based on the findings.

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Section: Literature Reviewsupporting

confidence: 67%

The Impact of Institutional Quality on Sectoral Foreign Direct Investment in Pakistan: A Dynamic Simulated ARDL Approach

Khan

et al. 2023

Sustainability

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“…MNEs are becoming more aware of India's locational advantages in knowledge-based industries, which has resulted in increased spending on software development and the establishment of international R&D centres in India to take advantage of these advantages. This essay examines India's foreign direct investment (FDI) experience since 1991 from a comparative East Asian standpoint (Saikia, 2021). Ferrari-Filho Fernando andothers (2008-2009) analyzed that, a proposal for an exchange rate regime that would enable emerging nations to reduce their reliance on foreign capital and external vulnerability and fragility, thereby enabling the adoption of domestic macroeconomic policies that would boost output and employment.…”

Section: Review Of Literaturementioning

confidence: 99%

An Empirical Analysis of Exchange Rate Volatility and Foreign Investment Inflows from the Post-Reform Period to 2020 in India

2024

European Economic Letters

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The paper empirically examined the impact and relationship between exchange rate volatility and foreign investment inflow in India. The parameters selected to examine the impact and relationship are exchange rate volatility and foreign investment inflow. The analysis was carried out using time series data of thirty years from the period of 1990 to 2020. For the methodology, we used the Augmented Dickey-Fuller (ADF) stationarity test for unit roots. Viewing the stationarity test, we got our data is stationary at first difference with intercept. After that, the Engel Granger cointegration test is conducted to check the relationship, and finally VAR model is constructed to know the significance of the coefficient of the model. Here we reject the null hypothesis and get that data is highly significant at 1%, 5% and 10% level of significance. The study finds that there is a shortrun relationship between exchange rate volatility and foreign investment inflow but there is a high impact of exchange on capital inflow in India.

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“…Their results confirmed that, in the long run, IQ attracted FDI in the manufacturing and service sectors while having no effect on IQ in the primary sector. By using a novel dataset on bilateral firm-to-destination overseas investment of Indian international firms, Saikia (Saikia, 2021) concluded that FDI in the manufacturing and service sectors was attracted by those countries with good institutions. Using both a case study of Costa Rica's investment-promotion activities and crossnational industry-level FDI analyses, Bailey & Warby (Bailey & Warby, 2019) contended that democracy and political stability had no effect on FDI in the manufacturing sector but that it was beneficial for the other FDI type that they investigated (i.e.…”

Section: Prior Literaturementioning

confidence: 99%

A sectoral analysis of institutional quality and foreign direct investment in Mena countries: does sector type matter?

Bergougui

Murshed

2022

Rev World Econ

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We examine the institutional quality (IQ) and foreign direct investment (FDI) nexus across 10 Middle Eastern and North African (MENA) countries from 1990 to 2018 based on disaggregated FDI data in the primary (extractive), secondary (manufacturing) and tertiary (service) sectors. There is prima facie evidence that IQ plays an important role in determining FDI at the aggregate level in the MENA region. Once we use sectoral FDI flows data, IQ is irrelevant to FDI inflows into the primary sector. Four aspects of IQ: rule of law index, accountability index, property rights and the aggregate IQ index, however, significantly impact secondary and tertiary FDI inflows into the MENA region, while corruption only plays a significant part in reducing FDI in the tertiary sector. Improving IQ is thus key to attracting more manufacturing and service sector FDI.

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Foreign direct investment and institutions: A case of Indian firms

Cited by 8 publications

References 25 publications

The Impact of Institutional Quality on Sectoral Foreign Direct Investment in Pakistan: A Dynamic Simulated ARDL Approach

The Impact of Institutional Quality on Sectoral Foreign Direct Investment in Pakistan: A Dynamic Simulated ARDL Approach

An Empirical Analysis of Exchange Rate Volatility and Foreign Investment Inflows from the Post-Reform Period to 2020 in India

A sectoral analysis of institutional quality and foreign direct investment in Mena countries: does sector type matter?

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