Do the FDI, Economic growth and Trade affect each other for India: An ARDL Approach
AbstractThis paper examines the dynamic causal relationships between foreign direct investment (FDI), trade and economic growth in India by applying the bounds testing (ARDL) approach to cointegration for the period from 1970 to 2012. The bounds tests suggest that the variables of interest are bound together in the long-run when GDP per capita is the dependent variable. The empirical findings confirm that there is bi-directional Granger causality between FDI and trade, unidirectional Granger causality running from FDI to economic growth and from economic growth to capital investment but there is no Granger causality from economic growth to FDI and capital investment to per capita GDP.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 51447.
Date of creation: 10 Nov 2013
Date of revision:
FDI; trade openness; economic growth; ARDL cointegration; ECM; India;
Find related papers by JEL classification:
- C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models &bull Diffusion Processes
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
- F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
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