• SYAM PRASAD

An attempt has been made in this paper to examine the crowds-in and crowds-out effect of Foreign Direct Investment (FDI) in domestic capital formation in India. The model used in the study is based on the model developed by Agosin and Mayer in 2000. In the model, FDI has been included as an explanatory variable. The period of study is 21 years from 1990-91 to 2011-12. The coefficient of FDI is ‘N 0.891419’ shows that every N1 increase in FDI, domestic capital increase by ‘N 0.891419’. Based on the results, it would be possible to conclude that FDI, in terms of increasing domestic capital formation, produce a long term positive externalities in India. At the beginning of the 1990s India was strongly hit by transformation process. These policy changes are also influenced. India successful in taking advantage of these changes, because the inflows of FDI have a spillover effect and India taking advantage of the positive spillover effect of FDI and transferred it in to domestic capital formation.

FDI, Domestic Capital Formation, crowd in, crowd out

"The Impact of FDI on Domestic Investment in India: A Sector-wise Analysis of Crowd-in and Crowd-out Effect", International Journal of Emerging Technologies and Innovative Research (www.jetir.org), ISSN:2349-5162, Vol.9, Issue 4, page no.f127-f142, April-2022, Available :http://www.jetir.org/papers/JETIR2204517.pdf

"The Impact of FDI on Domestic Investment in India: A Sector-wise Analysis of Crowd-in and Crowd-out Effect", International Journal of Emerging Technologies and Innovative Research (www.jetir.org | UGC and issn Approved), ISSN:2349-5162, Vol.9, Issue 4, page no. ppf127-f142, April-2022, Available at : http://www.jetir.org/papers/JETIR2204517.pdf