Impact of Foreign Direct Investment on GDP Growth Rate in India: Analysis of the New Millennium
- First Online: 14 September 2019
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- Pooja Gupta 3 ,
- Vikku Aggarwal 3 ,
- Karan Champaneri 3 &
- Kritika Narayan 3
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Foreign direct investment (FDI) is described as an investment into another country by an organization with the idea of production of a good or marketing of a product in the country of investment. Besides being a pivotal source of non-debt capital inflow for the host country, it also commits transfer of technology, skill and know-how from one country to another. It has essentially been contemplated as crucial for the integrity of global economies ensuring deeper and enduring ties between nations. This chapter aims to look at the impact of FDI on the growth rate in the Indian economy. The growth rate of the economy is measured as the growth rate in GDP. The time period of the study is the new millennium, that is, from 2001 onward till early 2018. The time period has been chosen such as to study the impact of FDI on the growth rate of India in the pre-financial crisis period (2002–2007), the financial crisis years (2008–2012) and the post-financial crisis period (2013–2018). This delineation of the time period helps in understanding the impact in a better way.
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Gupta, P., Aggarwal, V., Champaneri, K., Narayan, K. (2020). Impact of Foreign Direct Investment on GDP Growth Rate in India: Analysis of the New Millennium. In: Rajagopal, Behl, R. (eds) Innovation, Technology, and Market Ecosystems. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-23010-4_11
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The nexus between foreign direct investment (FDI) and economic growth has remained vexing and inconclusive in the history of pre- and post-liberalisation studies of development economics. Although the endogenous growth theory, one of the earliest theories in this regard, prophesies a positive FDI to economic growth relationship, this ...
The study recognises the fact that the treatment of FDI inflows in an aggregate form instead of a sector-specific approach while correlating it with economic growth remains the most tenuous assumption of the previously conducted studies. Driven by the impetus of filling this gap, this study applies a time-varying parameter model with vector ...
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Note 12: Nidumolu, R., (2020) research on FDI and overall economic growth by analyse the data of FDI inflow in India from 2001-2020. Note 13: Study by Lia, C, Y & Sarkar , S, (2011) measured the ...
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The foreign direct investment-economic growth nexus. International Review of Economics & Finance, 42, 116-133. Article Google Scholar Jayaraman, T. K., Choong, C. K., & Ng, C. F. (2017). Foreign direct investment and growth of India: Does financial sector development help in improving absorptive capacity?
Impact of FDI on Economic Growth: To examine the impact of Foreign Direct Investment on Economic Growth (i.e., indicator of the economic development - GDP) a model is considered as in equation 2 along function of Y i.e., Y=f (FDI): Equation 2: Y GDP = ( ) Where, Y is response variable representing Economic Growth, is total factor intercept,
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