Arbeitspapier
Economic reforms, foreign direct investment and its economic effects in India
Foreign direct investment (FDI) has boomed in post-reform India. Moreover, the composition and type of FDI has changed considerably since India has opened up to world markets. This has fuelled high expectations that FDI may serve as a catalyst to higher economic growth. We assess the growth implications of FDI in India by subjecting industry-specific FDI and output data to Granger causality tests within a panel cointegration framework. It turns out that the growth effects of FDI vary widely across sectors. FDI stocks and output are mutually reinforcing in the manufacturing sector. In sharp contrast, any causal relationship is absent in the primary sector. Most strikingly, we find only transitory effects of FDI on output in the services sector, which attracted the bulk of FDI in the post-reform era. These differences in the FDI-growth relationship suggest that FDI is unlikely to work wonders in India if only remaining regulations were relaxed and still more industries opened up to FDI.
- Sprache
-
Englisch
- Erschienen in
-
Series: Kiel Working Paper ; No. 1272
- Klassifikation
-
Wirtschaft
International Investment; Long-term Capital Movements
Multinational Firms; International Business
Economywide Country Studies: Asia including Middle East
- Thema
-
Economic reform
Growth effects
India
Cointegration
Causality
Foreign direct investment
Direktinvestition
Wirtschaftswachstum
Branchenentwicklung
Schätzung
Indien
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Chakraborty, Chandana
Nunnenkamp, Peter
- Ereignis
-
Veröffentlichung
- (wer)
-
Kiel Institute for the World Economy (IfW)
- (wo)
-
Kiel
- (wann)
-
2006
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:41 MEZ
Datenpartner
Dieses Objekt wird bereitgestellt von:
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Objekttyp
- Arbeitspapier
Beteiligte
- Chakraborty, Chandana
- Nunnenkamp, Peter
- Kiel Institute for the World Economy (IfW)
Entstanden
- 2006
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