No abstract

This paper investigates the relationship between foreign direct investment (FDI) and employment opportunities in India. To investigate, they used coefficients of forward and backward linkages between foreign affiliates and local firms are also included to critically examine the impact of FDI on employment generation in India. Data for the present study was derived from the website of DIPP, MSME annual report, CSO, India and Economic survey report (2020-21) from the period 2006-2017 (due to unavailability of data). The empirical result shows that neither FDI create backward linkages with local firms nor foreign affiliates that have evidence of employment generation in the MSME sector in India. FDI creates only forward linkages with local firms to outsource or distribute their products to end consumers, the “market-seeking” motive of FDI. This study will help policymakers and government understand domestic firms' lacuna, FDI policy, and the channelization of foreign investment in manufacturing.

This study investigates the Spillover effects of inward foreign direct investments (FDI) and the probable absorption capacity of local firms (micro, small & medium enterprises) in India. To investigate the Spillover effects, we estimated the coefficients of the intersectoral linkages (backward & forward linkages) developed in economy and their respective performance in gross domestic production. Linear panel data model (fixed effects & random effects model), panel corrected standard error model and the Hausman Taylor instrument variable model employed to estimate the significant relationship between the variables. PCSE model provide robust standard error and control the problem of heteroskedasticity & autocorrelation, and Hausman Taylor model applied to deal with unobserved heterogeneity and check the robustness of the estimation of linear panel model. For the present study data collected for 27 industries of the economy (both manufacturing and service) from the year 2006-2017, since limited data are available for the study. Data collected from the MSME annual report, inputoutput & supply-use table from CSO, India, DIPP report for FDI data. The result indicates the negative relationship between inward FDI and gross domestic production of MSME sector, and forward linkages in economy significantly added to the GDP of the economy, indicating negative Spillover impact in upstream sector & positive Spillover in downstream sectors.