Foreign direct investment of India: an analysis based on 'dynamic or developmental approach'. Issue 1 (2nd January 2018)

• Record Type: Journal Article
• Authors: Saikia, Munmi; Borbora, Saundarjya
• Is Part Of: Transnational corporations review. Volume 10:Issue 1(2018)
• Page Start: 69
• Page End: 85
• Publication Date: 2018-01-02
• Subjects: Developmental approach -- OFDI -- VECM -- macroeconomic factor; 338.88
• DOI: 10.1080/19186444.2018.1436657
• Languages: English
• ISSNs: 1918-6444

Abstract

Abstract: This study draws on a 'dynamic or developmental approach' to international production as its analytical framework. The analysis is based on multivariate time-series data for the time period of 1980–2014. Its purpose is to investigate the dynamic relationship between foreign direct investment (FDI) position of India and home-country macroeconomic factors both in the short-run and long-run, employing vector error correction modelling (VECM). The study finds that the macroeconomic variables have a long-run impact on FDI position of India (captured by net OFDI), although no causality has been witnessed in the short-run. Dynamic analyses such as Impulse Response Function (IRF) and Forecast Error Variance Decomposition (FEVD) are also used to examine the long-run time path and endogenous structure of the variables, respectively.