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India as a Source of Outward Foreign Direct Investment


  • Rabin Hattari
  • Ramkishen Rajan


While India is an increasingly attractive destination for foreign capital, the country is also becoming a significant source of outflows. Many Indian enterprises view outward foreign direct investment (OFDI) as an important dimension of their corporate strategies. This paper presents some data on the magnitude and composition of Indian OFDI. It also discusses the rationale for and empirical determinants of overseas acquisitions by Indian companies. The empirical findings suggest that OFDI from India is not entirely different from that of other countries in that they are motivated by many common factors. There is evidence, however, that Indian OFDI is more market- and resource-seeking than OFDI from most other countries. The paper concludes with a broader discussion of the impact of the global rise of Indian companies on the Indian economy.

Suggested Citation

  • Rabin Hattari & Ramkishen Rajan, 2010. "India as a Source of Outward Foreign Direct Investment," Oxford Development Studies, Taylor & Francis Journals, vol. 38(4), pages 497-518.
  • Handle: RePEc:taf:oxdevs:v:38:y:2010:i:4:p:497-518 DOI: 10.1080/13600818.2010.524695

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    Cited by:

    1. Dr. Nihal Bayraktar, 2015. "Importance of Investment Climates for Inflows of Foreign Direct Investment in Developing Countries," Business and Economic Research, Macrothink Institute, vol. 5(1), pages 24-50, June.
    2. Stoian, Carmen, 2013. "Extending Dunning's Investment Development Path: The role of home country institutional determinants in explaining outward foreign direct investment," International Business Review, Elsevier, vol. 22(3), pages 615-637.
    3. Rao-Nicholson, Rekha & Ayton, Julie (Salaber), 2016. "Euphoria in financial markets: How Indian companies generate value in their cross-border acquisitions," Research in International Business and Finance, Elsevier, vol. 38(C), pages 494-508.
    4. Xie, En & Reddy, K.S. & Liang, Jie, 2017. "Country-specific determinants of cross-border mergers and acquisitions: A comprehensive review and future research directions," Journal of World Business, Elsevier, vol. 52(2), pages 127-183.
    5. Reddy, Kotapati Srinivasa, 2015. "Macroeconomic Change, and Cross-border Mergers and Acquisitions: The Indian Experience, 1991-2010," MPRA Paper 63562, University Library of Munich, Germany, revised 2015.
    6. Nihal Bayraktar, 2013. "Foreign Direct investment and Investment Climate," EcoMod2013 5294, EcoMod.
    7. Swati Virmani & Edmund Amann, 2015. "Is the evolution of India’s Outward FDI consistent with Dunning’s Investment Development Path sequence?," Working Papers 92160912, Lancaster University Management School, Economics Department.

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