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Autor
Babu Abraham (Rajagiri Business School)
Tytuł
Foreign Direct Investment - Domestic Investment Nexus : Evidence from India
Źródło
Contemporary Economics, 2021, vol. 15, nr 3, s. 267-275, tab., bibliogr. 19 poz.
Słowa kluczowe
Inwestycje bezpośrednie, Inwestycje zagraniczne, Model wektorowej korekty błędem
Direct investments, Foreign investment, Vector error correction model (VECM)
Uwagi
Klasyfikacja JEL: F21, E22, C32
summ.
Kraj/Region
Indie
India
Abstrakt
The relationship between foreign direct investment and domestic investment is intriguing. An important question arises - does foreign direct investment crowd in or crowd out domestic investment? This paper examines this nexus in the post-1991 period in India, which is also considered as the post-reform period. It is during this era; the above-mentioned topic gains more impetus as the economy opened up for further foreign inflows. The time period taken for the paper was from 1990-91 to 2014-15. The data series were checked for stationarity and the presence of long run relationship between foreign direct investment and domestic investment was analysed using cointegration test. Thereafter, the vector error correction model was estimated. The results clearly show that foreign direct investment crowds out domestic investment in India in the post reform period. The findings have significant policy implications because there is a substituting relationship between foreign direct investment and domestic investment in India. (original abstract)
Pełny tekst
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Bibliografia
Pokaż
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  6. Farla, K., & Combruggher, D., & Vertspagen, B. (2014). Institutions, foreign direct investment, and domestic investment: Crowding out or crowding in? World Development, 88, 1-9. https://doi.org/10.1016/j.worlddev.2014.04.008
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  8. Fry, M.J. (1993). FDI in a macroeconomic framework: Finance, efficiency, incentives and distortions [Policy Research Working Paper No. 1141]. World Bank.
  9. Gallagher, K. P., & Zarsky, L. (2007). The enclave economy: foreign investment and sustainable development in Mexico's Silicon Valley. The MIT Press.
  10. Gorg, H., & Greenaway, D. (2004). Much ado about nothing? Do domestic firms really benefit from foreign direct investment? The World Bank Research Observer, 19(2), 171-197. https://doi.org/10.1093/wbro/lkh019
  11. Helleiner, G.K. (1988). Transnational corporations and direct foreign investment. Handbook of Development Economics, 2, 27. https://doi.org/10.1016/S1573-4471(89)02014-0
  12. Johansen, S., & Juselius, K. (1990). Maximum likelihood estimation and inference on cointegration with application to the demand of money. Oxford Bulletin of Economics and Statistics, 52, 169-210.
  13. Moran, T. H., Graham, E. M. & Blomström, M. (2011). Does foreign direct investment promote development? Institute of International Economics.
  14. Morrissey, O., & Udomkerdmongkol. M. (2012). Governance, private investment and foreign direct investment in developing countries. World Development, 40(3), 437- 445. https://doi.org/10.1016/j.worlddev.2011.07.004
  15. Munemo, J. (2014). Business start-up regulations and the complementarity between foreign and domestic investment. Review of World Economics, 150, 745-761. https://doi.org/10.1007/s10290-014-0189-2
  16. Prasanna, N. (2010). Direct and indirect impact of foreign direct investment on domestic investment in India. Journal of Economics, 1 (2), 77-83. https://doi.org/10.1080/09765239.2010.11884926
  17. Ranjan, R., & Kumar, S. (2012). An empirical investigation of the impact of capital inflows on domestic investment in India. Indian Economic Review, 47(1), 15-32.
  18. Rath, B. N., & Bal, D. P. (2014). Do FDI and public investment crowd in or crowd out private domestic investment in India. The Journal of Developing Areas, 48(3), 269-284.
  19. World Bank. (2002). Global development finance 2002: financing the poorest countries. Global Development Finance. World Bank.
Cytowane przez
Pokaż
ISSN
2084-0845
Język
eng
URI / DOI
http://dx.doi.org/10.5709/ce.1897-9254.448
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