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Impact of Trade Liberalization on Foreign Direct Investment in Indian Industries

Author

Listed:
  • Bishwanath Goldar

    ()

  • Rashmi Banga

    (University of Delhi Enclave)

Abstract

The paper undertakes analyses at three levels and the results arrived at different levels indicate that trade liberalization has had a favourable effect on FDI flows in India. It is also found that the regions having greater extent of international trade are able to attract greater amount of FDI. Some evidence is found that point to differential effects of trade associated with international vertical integration and intra-industry trade. Though liberalization has led to a substantial increase in intra-industry trade, much of the intra-industry being horizontal in nature in India is not found to have a strong favourable effect on FDI.

Suggested Citation

  • Bishwanath Goldar & Rashmi Banga, 2007. "Impact of Trade Liberalization on Foreign Direct Investment in Indian Industries," Working Papers 3607, Asia-Pacific Research and Training Network on Trade (ARTNeT), an initiative of UNESCAP and IDRC, Canada..
  • Handle: RePEc:esc:wpaper:3607
    as

    Download full text from publisher

    File URL: http://www.unescap.org/tid/artnet/pub/wp3607.pdf
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    References listed on IDEAS

    as
    1. C. Veeramani, 2007. "Industry-Specific Determinants of Intra-Industry Trade in India," Indian Economic Review, Department of Economics, Delhi School of Economics, vol. 42(2), pages 211-229, December.
    2. James R. Markusen, 1995. "The Boundaries of Multinational Enterprises and the Theory of International Trade," Journal of Economic Perspectives, American Economic Association, vol. 9(2), pages 169-189, Spring.
    3. Bishwanath GOLDAR & Suresh Chand AGGARWAL, 2005. "Trade Liberalization And Price-Cost Margin In Indian Industries," The Developing Economies, Institute of Developing Economies, vol. 43(3), pages 346-373, September.
    4. James R. Markusen & Keith E. Maskus, 2001. "A Unified Approach to Intra-Industry Trade and Direct Foreign Investment," NBER Working Papers 8335, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Makun, Keshmeer Kanewar, 2016. "Direct Foreign Investment and its Determinants: A Case Study - Gli investimenti diretti esteri e loro determinanti : studio di un caso," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 69(2), pages 151-174.
    2. Dongre, Anil P., 2012. "Policy changes in the wake of globalization and its impact on Indian industries," Journal of Policy Modeling, Elsevier, vol. 34(3), pages 476-496.
    3. Rana Ejaz Ali Khan & Qazi Muhammad Adnan Hye, 2014. "Foreign direct investment and liberalization policies in Pakistan: An empirical analysis," Cogent Economics & Finance, Taylor & Francis Journals, vol. 2(1), pages 1-12, December.

    More about this item

    Keywords

    Trade Liberalization; Foreign Direct Investmetn; India; Indian Industries;

    JEL classification:

    • F1 - International Economics - - Trade

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