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Foreign Direct Investment and Employment in Indian Manufacturing Industries

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  • Sanjaya Kumar Malik

    (Institute for Studies in Industrial Development (ISID))

Abstract

This paper examines the employment effect of foreign direct investment (FDI) in India’s manufacturing industries. It also examines whether the nature of employees mediates the employment effect of FDI in the manufacturing industry. The paper employs a balanced panel data of 54 three-digit industries from the Annual Survey of Industries for the period 2008–2009 to 2015–2016. Estimating a dynamic labour demand model through the system generalised method of moments estimator, it does not find any considerable effect of FDI on employment in India’s manufacturing industries. Even after controlling for the kind of employees, FDI has not been found to have any significant impact on domestic demand for labour in Indian manufacturing industries. This study thus does not consider FDI as an important channel for employment generation in the manufacturing industry in India.

Suggested Citation

  • Sanjaya Kumar Malik, 2019. "Foreign Direct Investment and Employment in Indian Manufacturing Industries," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 62(4), pages 621-637, December.
    • Handle: RePEc:spr:ijlaec:v:62:y:2019:i:4:d:10.1007_s41027-019-00193-6
    DOI: 10.1007/s41027-019-00193-6
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