IDEAS home Printed from
   My bibliography  Save this article

Relationship Between Fdi Distribution And Regional Economic Aggregates: An Evidence From India


  • Tushar Ranjan Panigrahi

    (St. Fransis Institute of Management studies, Mumbai, India)

  • Sunita Mall

    (MICA, Ahmedabad, India)


India is a rapidly developing country with diversified culture, language, economic status and resource distribution. Foreign Direct investment(FDI) brings employment opportunities, generate more income, lead to urbanization in the region. FDI has a growth impact on the targeted region. In India the problem of regional imbalances is very prominent and regional economic disparity is a major concern. This research paper made an attempt to check if the FDI inflow to the regions are significantly dependent on socio economic variables. The association between the variables is studied using Karl Pearson correlation analysis. The impact of regional socio economic factors on FDI inflow to the regions is also investigated in this paper using regression analysis. The data is collected for the time period of January 2000 to December 2016 from department of industrial planning and promotions, ministry of commerce and industries, Govt. of India, Ministry of economic affairs etc. The variables like income from agriculture, income from industry, per capita NSDP, population density, HDI, per capita GSDP, state GDP, annual wage per worker are found to have significant impact on FDI inflow to the regions and are in line with the existing literature. This piece of research can help the government, policymakers and analysts to introduce the policies that can attract more FDI to several regions ensuring India’s economic growth.

Suggested Citation

  • Tushar Ranjan Panigrahi & Sunita Mall, 2017. "Relationship Between Fdi Distribution And Regional Economic Aggregates: An Evidence From India," Romanian Economic Business Review, Romanian-American University, vol. 12(4), pages 109-124, december.
  • Handle: RePEc:rau:journl:v:12:y:2017:i:4:p:109-124

    Download full text from publisher

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. Parthapratim Pal & Jayati Ghosh, 2007. "Inequality in India: A survey of recent trends," Working Papers 45, United Nations, Department of Economics and Social Affairs.
    2. Peter Nunnenkamp & Rudi Stracke, 2008. "Foreign Direct Investment In Post-Reform India: Likely To Work Wonders For Regional Development?," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 33(2), pages 55-84, December.
    3. Peter Nunnenkamp & Megha Mukim, 2012. "The clustering of FDI in India: the importance of peer effects," Applied Economics Letters, Taylor & Francis Journals, vol. 19(8), pages 749-753, May.
    4. Morris, Sebastian, 2004. "A Study of the Regional Determinants of Foreign Direct Investments in India, and the Case of Gujarat," IIMA Working Papers WP2004-03-07, Indian Institute of Management Ahmedabad, Research and Publication Department.
    5. Laijun Luo & Louis Brennan & Chang Liu & Yuze Luo, 2008. "Factors Influencing FDI Location Choice in China's Inland Areas," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 16(2), pages 93-108, March.
    6. Ansari, Mohd. Shamim & Ranga, Mukesh, 2010. "India’S Foreign Direct Investment: Current Status, Issues And Policy Recommendations," UTMS Journal of Economics, University of Tourism and Management, Skopje, Macedonia, vol. 1(2), pages 1-16.
    7. Chidlow, Agnieszka & Salciuviene, Laura & Young, Stephen, 2009. "Regional determinants of inward FDI distribution in Poland," International Business Review, Elsevier, vol. 18(2), pages 119-133, April.
    8. Roberta De Santis & Maria Cristina Mercuri & Claudio Vicarelli, 2001. "Taxes and Location of Foreign Direct Investments: an Empirical Analysys for the European Union Countries," ISAE Working Papers 24, ISTAT - Italian National Institute of Statistics - (Rome, ITALY).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Gourab Chakraborty, 2018. "Sub-National Location Determinants of Inward Foreign Direct Investment: A Statistical Appraisal Across Regions in India," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 8(8), pages 1026-1041, August.
    2. Chidlow, Agnieszka & Holmström-Lind, Christine & Holm, Ulf & Tallman, Steve, 2015. "Do I stay or do I go? Sub-national drivers for post-entry subsidiary development," International Business Review, Elsevier, vol. 24(2), pages 266-275.
    3. Frank Bickenbach & Wan-Hsin Liu & Peter Nunnenkamp, 2015. "Regional concentration of FDI in post-reform India: A district-level analysis," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 24(5), pages 660-695, August.
    4. Kayam, Saime Suna & Ecer, Sencer & Gupta, R, 2011. "Social determinants of intra-regional dispersion of FDI in India," MPRA Paper 39153, University Library of Munich, Germany.
    5. Jagannath Mallick, 2013. "Private investment in India: regional patterns and determinants," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 51(2), pages 515-536, October.
    6. Elina De Simone & Marcella D’Uva, 2017. "Social Support, Industrial Parks and FDI Location Choice Across Hungarian Counties," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 133(3), pages 1031-1045, September.
    7. Dirk Holtbrügge & Carina B. Friedmann, 2016. "Does location choice affect foreign subsidiary success in India? An empirical study based on Porter's diamond model," International Journal of Business and Emerging Markets, Inderscience Enterprises Ltd, vol. 8(1), pages 3-29.
    8. De Clercq, Dirk & Danis, Wade M. & Dakhli, Mourad, 2010. "The moderating effect of institutional context on the relationship between associational activity and new business activity in emerging economies," International Business Review, Elsevier, vol. 19(1), pages 85-101, February.
    9. Adewale Samuel Hassan, 2022. "Does Country Risk Influence Foreign Direct Investment Inflows? A Case of the Visegrád Four," Economies, MDPI, vol. 10(9), pages 1-22, September.
    10. Michaelides, Panayotis G. & Belegri-Roboli, Athena & Economakis, George & Milios, John G., 2005. "The Determinants of Investment Activity in Greece (1960-’99)," MPRA Paper 74548, University Library of Munich, Germany.
    11. Shruti Sharma, 2018. "Does Plant Size Matter? Differential Effects of Foreign Direct Investment on Wages and Employment in Indian Manufacturing," Asian Development Review, MIT Press, vol. 35(1), pages 52-80, March.
    12. Wang, Chengqi & Hong, Junjie & Kafouros, Mario & Boateng, Agyenim, 2012. "What drives outward FDI of Chinese firms? Testing the explanatory power of three theoretical frameworks," International Business Review, Elsevier, vol. 21(3), pages 425-438.
    13. Dr. Kavita Saxena, 2014. "An Evaluation of Foreign Direct Investment in India," Journal of Commerce and Trade, Society for Advanced Management Studies, vol. 9(2), pages 96-100, October.
    14. Marie Daumal, 2013. "The Impact of Trade Openness on Regional Inequality: The Cases of India and Brazil," The International Trade Journal, Taylor & Francis Journals, vol. 27(3), pages 243-280, August.
    15. Shima’a Hanafy, 2014. "Determinants of FDI Location in Egypt: Empirical Analysis Using Governorate Panel Data," Working Papers 875, Economic Research Forum, revised Nov 2014.
    16. Andrzej CieŚlik, 2013. "Determinants of the Location of Foreign Firms in P olish Regions: Does Firm Size Matter?," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, vol. 104(2), pages 175-193, April.
    17. Andrea Gauselmann & Philipp Marek, 2012. "Regional determinants of MNE’s location choice in post-transition economies," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 39(4), pages 487-511, November.
    18. Schäffler, Johannes & Hecht, Veronika & Moritz, Michael, 2014. "Regional determinants of German FDI in the Czech Republic : evidence from a gravity model approach," IAB-Discussion Paper 201403, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    19. Megha Mukim & Peter Nunnenkamp, 2012. "The Location Choices of Foreign Investors: A District-level Analysis in India," The World Economy, Wiley Blackwell, vol. 35(7), pages 886-918, July.
    20. Ionel Sergiu Pirju & Gabriela Marchis & Manuela Panaitescu & Nicolae Florin Prunău & Alisa Mihaela Ambrozie, 2023. "Foreign Direct Investments—A Perspective of Sustainability: Evidence from the Austrian and German Labor Market," Sustainability, MDPI, vol. 15(18), pages 1-18, September.


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:rau:journl:v:12:y:2017:i:4:p:109-124. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Alex Tabusca (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.