UGC Approved Journal no 63975(19)

ISSN: 2349-5162 | ESTD Year : 2014
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Published in:

Volume 9 Issue 2
February-2022
eISSN: 2349-5162

UGC and ISSN approved 7.95 impact factor UGC Approved Journal no 63975

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Published Paper ID:
JETIR2202265


Registration ID:
320193

Page Number

c374-c385

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Title

Does Foreign Direct Investment Promotes Economic Growth in India? Evidence from Simple Regression Model

Abstract

Foreign Direct investment (FDI) and its impact on economic growth has been the interesting subject in recent financial literature because it is an important implication for policy makers and academicians. FDI is vital source of capital formation and it brings new technology, modern business practices, new ideas and generation of employment in emerging market economies namely India. This paper empirically explores the impact of FDI on the economic growth in India. It also examined the short and long run association of economic growth and FDI. Finally, trends in FDI inflows into India analyzed. Time series techniques namely the Augmented Dickey–Fuller test, Granger causality test, Engle-Granger co-integration test and simple regression model were applied. The annul data of sectors wise FDI, country wise FDI, yearly wise GDP and FDI from 2009 to 2020 sourced from RBI website for analysis and discussions. According to Reserve Bank of India report, there has been a significant increase in FDI inflows into India from 2010 onwards. The total FDI inflows into India was $42 billion in 2010-11 and had consistently gone up from $ 46 billion in 2012-13 to $ 81 billion in 2020-21. In case of sector wise FDI, manufacturing sector in India received the of maximum amount of FDI equity inflows when it was compared to other sectors. The FDI inflow in manufacturing sector had increased to $ 9.61 billion in 2018-19 from $ 7. 91 billion in 2014-15.The result from regression suggests that FDI has positively impacts the economic growth in India. The results of Granger causality results show a feedback relationship exists between FDI and economic growth. The result from the residual-based co-integration test reveals that existence of a co-integrating relationship between these two variables and tend to move together the same direction in long run. Although the several studies on same issue has been examined in emerging market economies namely India, the present study was mainly focused to this issue fairly large set of data and it covers during Covid 19 outbreak pandemic to bride research gap in literature and also suggests the suitable policies implications and recommendations.

Key Words

FDI, Economic Growth, Co-integration, Granger Causality test and Regression

Cite This Article

"Does Foreign Direct Investment Promotes Economic Growth in India? Evidence from Simple Regression Model", International Journal of Emerging Technologies and Innovative Research (www.jetir.org), ISSN:2349-5162, Vol.9, Issue 2, page no.c374-c385, February-2022, Available :http://www.jetir.org/papers/JETIR2202265.pdf

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2349-5162 | Impact Factor 7.95 Calculate by Google Scholar

An International Scholarly Open Access Journal, Peer-Reviewed, Refereed Journal Impact Factor 7.95 Calculate by Google Scholar and Semantic Scholar | AI-Powered Research Tool, Multidisciplinary, Monthly, Multilanguage Journal Indexing in All Major Database & Metadata, Citation Generator

Cite This Article

"Does Foreign Direct Investment Promotes Economic Growth in India? Evidence from Simple Regression Model", International Journal of Emerging Technologies and Innovative Research (www.jetir.org | UGC and issn Approved), ISSN:2349-5162, Vol.9, Issue 2, page no. ppc374-c385, February-2022, Available at : http://www.jetir.org/papers/JETIR2202265.pdf

Publication Details

Published Paper ID: JETIR2202265
Registration ID: 320193
Published In: Volume 9 | Issue 2 | Year February-2022
DOI (Digital Object Identifier):
Page No: c374-c385
Country: Kumbakonam, Thanjavur District , Tamilnadu , India .
Area: Management
ISSN Number: 2349-5162
Publisher: IJ Publication


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