Foreign Direct Investment (FDI) plays a pivotal role in the process of economic development particularly in the capital scarce country, where the domestic base of created assets like technology, skills and entrepreneurship are quite limited. It provides financial resources for investment in a host country and thereby augments domestic saving efforts. It also plays an important role in accelerating the pace of economic growth. FDI provides the much-needed foreign exchange to help the bridge the balance of payment or trade deficit. FDI brings complementary assets such as technology, management and organizational competencies and there are spillover effects of these assets on the rest of the economy. FDI is treated as a main engine of economic growth and technological development which provides ample opportunities in accelerating economic development. FDI contributes to exports directly and an enhanced export possibility contributes to the growth of the host economies by relaxing demand side constraints on economic growth. The present study adds to the existing literature on determinants of FDI by examining the degree of correlation between FDI inflow in India and several economic factors like exchange rate, GDP, openness of trade etc.
Cite this article:
Kanika Dhingra. Economic Factors and Foreign Direct Investment in India: A Correlation Study. Asian Journal of Management. 2022;13(1):89-3. doi: 10.52711/2321-5763.2022.00016
Kanika Dhingra. Economic Factors and Foreign Direct Investment in India: A Correlation Study. Asian Journal of Management. 2022;13(1):89-3. doi: 10.52711/2321-5763.2022.00016 Available on: https://ajmjournal.com/AbstractView.aspx?PID=2022-13-1-16
1. A S Shiralashetti and S S Hugar (2009), Foreign Direct Investment and Economic Development of India: A Diagnostic Study, The ICFAI University Journal of Managerial Economics, 7(1).
2. Dinesh Mahajan (2008), impact of Liberalisation of Foreign Direct Investment in India: An Empirical Study, Journal of Banking, Information Technology and Management, 5(2).
3. Idris Jajri (2009), Foreign Direct Investment and Economic Growth: Cointegration Techniques, The ICFAI University Journal of Managerial Economics, 7(3 and 4).
4. Ila Chaturvedi (2011), “Role of FDI in Economic Development of India: Sectoral Analysis” International Conference on Technology and Business Management.
5. Kulwinder Singh (2005), Foreign Direct Investment in India: A Critical Analysis of FDI from 1991¬2005, Centre for Civil Society, New Delhi.
6. Linda S. Goldberg, “Exchange Rates and Foreign Direct Investment” Written for Princeton Encyclopedia of the World Economy, Princeton University Press.
7. Muhammad Muazzam Mughal (2011), does market size affect FDI? The Case of Pakistan, Interdisciplinary Journal of Contemporary Research in Business, 2(9).
8. Narendra Singh Bohra, et.al. (2011), Foreign Direct Investment (FDI) In India Service Sector (A Study of Post Liberalization), International Journal for Economic Research, 2(2).
9. National Council of Applied Economic Reseacrh (2009), FDI in India & Its Growth Linkages.
10. Rajib Kumar Sahoo (2005), Foreign Direct Investment and Growth of Manufacturing Sector: An Empirical Study in Post Reform India, Institute for Social and Economic Change, Bangalore.
11. Rashmi Banga (2003), impact of Government Policies and Investment Agreements on FDI Inflows, Indian Council for Research on International Economic Relations Working Paper No.116.
12. Rashmi Banga (2005), critical issues in India’s Service¬ Led Growth, Indian Council for Research on International Economic Relations Working Paper.
13. S. Rameshkumar and V. Alagappan (2008), Foreign Direct Investment in India during the Post Liberalisation Period, The ICFAI Journal of Public Finance, 6(1).
14. Nilofer Hussaini. N H (2010), Economic factors and Foreign Direct Investment in India: A correlation study, Asian Journal of Management Research