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Outward FDI from India: A macro level examination in the presence of structural breaks

Author

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  • Rishika Nayyar

    (Indian Institute of Foreign Trade,New Delhi,India)

  • Jaydeep Mukherjee

    (Indian Institute of Foreign Trade,New Delhi,India)

Abstract

The surge in outward foreign direct investment from emerging markets has made it imperative to examine the phenomenon from both macro level (i.e. direct effect of home country) and micro level (i.e. indirect effect of home country) (Gammeltoft et al., 2010; Cuervo-Cazurra, 2011). The paper adopts macro level approach in the examination of relationship between OFDI flows from India during the period 1984 to 2015, and home country characteristics such as, macroeconomic environment, financial development, trade and investment policy and the knowledge- based factors. Incorporating the structural breaks in the empirical model, results suggest the existence of long-run relationship between OFDI flows and selected home country factors. Financial market developmentboth stock market and banking sector, liberalized trade and investment policy regime significantly affect the quantum of India’s OFDI flows. Policy implications are discussed.

Suggested Citation

  • Rishika Nayyar & Jaydeep Mukherjee, 2018. "Outward FDI from India: A macro level examination in the presence of structural breaks," Working Papers 1833, Indian Institute of Foreign Trade.
    • Handle: RePEc:ift:wpaper:1833
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    More about this item

    Keywords

    OFDI; Emerging Economies; Home Country Characteristics; Structural Breaks;
    All these keywords.

    JEL classification:

    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

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