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Incentives to Attract Foreign Direct Investment in Emerging Economies: A Causality Analysis for the Indian Case

Incentives to Attract Foreign Direct Investment in Emerging Economies: A Causality Analysis for the Indian Case
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Author(s): Ishita Ghoshal (Symbiosis International University, India)and Ishita Ghosh (Symbiosis International University, India)
Copyright: 2017
Pages: 35
Source title: Outward Foreign Direct Investment (FDI) in Emerging Market Economies
Source Author(s)/Editor(s): Tomasz Dorożyński (University of Lodz, Poland)and Anetta Kuna-Marszałek (University of Łódź, Poland)
DOI: 10.4018/978-1-5225-2345-1.ch014

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Abstract

The study delves into a diagnostic check for macroeconomic factors that may cause and explain outward FDI flows to India as a representative of the emerging economies. The seventeen top investing economies to India across the period from 2008-14 reveal that overall FDI outflows, inflation, exchange rate and growth of the economy affect FDI outflows to India in the long run where only exchange rate has a causal effect. Also, the above-mentioned variables except growth along with the size of the economy has significant effect on the extent of FDI flows to India from the economies considered for the study.

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