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Foreign Direct Investment and Economic Activity in India

Author

Listed:
  • Pami Dua

    (Delhi School of Economics)

  • Aneesa I. Rashid

    (Oakland University, Rochester)

Abstract

This paper examines the relationship between foreign direct investment and economic activity in India in the post liberalisation period. Foreign direct investment is measured both by the amount approved as well as the actual flows. Economic activity is measured by the index of industrial production. Granger causality tests and innovation accounting analysis suggest that FDI flows (approvals and actual) respond to the level of industrial production. Actual flows, however, do not Granger-cause industrial output.

Suggested Citation

  • Pami Dua & Aneesa I. Rashid, 1999. "Foreign Direct Investment and Economic Activity in India," Working papers 62, Centre for Development Economics, Delhi School of Economics.
  • Handle: RePEc:cde:cdewps:62
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    Cited by:

    1. Rudra P. Pradhan, Mak B. Arvin, & Mahendhiran Nair, Jay Mittal, & Neville R. Norman, 2017. "Telecommunications infrastructure and usage and the FDI–growth nexus: evidence from Asian-21 countries "Abstract: This paper examines causal relationships between telecommunications infrastructur," Department of Economics - Working Papers Series 2032, The University of Melbourne.
    2. 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.
    3. James Laurenceson & Abby Kamalankanthan, "undated". "How important is foreign capital to income growth in China and India?," EAERG Discussion Paper Series 0405, School of Economics, University of Queensland, Australia.

    More about this item

    Keywords

    Liberalization; Foreign Direct Investment; Granger Causality;

    JEL classification:

    • C3 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables
    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance
    • O5 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies

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