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Employment Effect of Foreign Direct Investment in Indian Manufacturing Industries

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  • Sanjaya Kumar Malik

    (Institute for Studies in Industrial Development, New Delhi)

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 industries. The paper employs a balanced panel data of 54 three digit industries from the Annual Survey of Industries for the period from 2008 09 to 2015 16. Estimating a dynamic labour demand model through the System Generalised Method of Moment estimator, it does not underscore any considerable effect of FDI on employment in India’s manufacturing industries. Even after controlling forthe nature ofemployees, FDI is not 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 industries in India.

Suggested Citation

  • Sanjaya Kumar Malik, 2019. "Employment Effect of Foreign Direct Investment in Indian Manufacturing Industries," Working Papers 206, Institute for Studies in Industrial Development (ISID).
    • Handle: RePEc:sid:wpaper:206
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