Economic Reforms, FDI, and Economic Growth in India: A Sector Level Analysis

Chakraborty, Chandana; Nunnenkamp, Peter

doi:10.1016/j.worlddev.2007.06.014

Cited by 227 publications

(184 citation statements)

References 36 publications

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“…However, despite increasing flows of FDI especially in recent years, the FDI-growth nexus in India has not yet been intensively investigated. To the best of our knowledge, only a handful of studies to date-such as Pradhan (2002); Chakraborty and Basu (2002); Sahoo and Mathiyazhagan (2003); Agrawal (2005); Chakraborty and Nunnenkamp (2008); Agrawal and Khan (2011);and Dash and Parida (2013)-have attempted to tackle the issue and have provided mixed conclusions. For example, Pradhan (2002) employs a production function analysis to analyze the effect of inward FDI on economic growth in India; he finds that FDI does not have significant positive growth impacts.…”

Section: Introductionmentioning

confidence: 99%

“…Agrawal (2005) confirms the findings of Pradhan (2002) in that FDI has had little to do with economic growth in India. On the other hand, Chakraborty and Nunnenkamp (2008) use a panel cointegration method to explore the dynamic relationship between FDI and economic growth; they find that the influx of FDI contributes to economic growth for the Indian economy. Dash and Parida (2013) utilize a vector error-correction (VEC) model in examining the issue; they report in passing a beneficial effect of FDI on growth, after controlling for trade.…”

Section: Introductionmentioning

confidence: 99%

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Does FDI Really Matter to Economic Growth in India?

Baek

2017

Economies

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Abstract:The main contribution of this article is to examine the productivity spillover effects from India's inward foreign direct investment (FDI), controlling for trade, in the framework of the cointegrated vector autoregression (CVAR). For this purpose, using the Solow residual approach the aggregate total factor productivity (TFP) in India is estimated to measure FDI-induced spillovers. The results show that the inflow of FDI to India indeed improves TFP growth through positive spillover effects. We also find that trade appears to have a detrimental effect on TFP growth in India.

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Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Does FDI Really Matter to Economic Growth in India?

Baek

2017

Economies

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“… Sectoral composition of FDI. FDI in the primary and services sectors tends to have fewer backward and forward linkages to other domestic sectors and, hence, boost growth less than FDI in the capital-intensive and technologically advanced manufacturing sector (Aykut and Sayek 2005;Cipollina et al 2012;Chakraborty and Nunnenkamp 2008).…”

mentioning

confidence: 99%

Weakness in Investment Growth: Causes, Implications and Policy Responses

Kose¹,

Ohnsorge²,

Ye³

et al. 2017

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Abstract: Investment growth in emerging market and developing economies has slowed sharply since 2010. This paper presents a comprehensive analysis of the causes and implications of this slowdown and presents a menu of policy responses to improve investment growth. It reports four main results. First, the slowdown has been broad-based and most pronounced in the largest emerging markets and in commodity exporters. Second, it reflects a range of obstacles: weak activity, negative terms-of-trade shocks, declining foreign direct investment inflows, elevated private debt burdens, heightened political risk, and adverse spillovers from major economies. Third, by slowing capital accumulation and technological progress embedded in investment, weak post-crisis investment growth has contributed to sluggish growth of potential output in recent years. Finally, although specific policy priorities depend on country circumstances, policymakers can boost investment both directly, through public investment, and indirectly, by encouraging private investment, including foreign direct investment, and by undertaking measures to improve overall growth prospects and the business climate. JEL Classification Numbers: E22, F2, F6, O1, O4 Terms of use: Documents in

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“…Even in the 1980s, the average FDI was around US$0.2 billion per year. However, after the adoption of neo-liberal policies, FDI increased in the 1990s and reached its peak in 1996-97 at US$6 billion and then declined to $5.3 billion in 1997-98 (Chakraborty and Nunnenkamp, 2008). However, India was not unique in witnessing this; such trends were observed in several developing countries.…”

Section: The Indian Experiencementioning

confidence: 99%

Foreign Capital Investment into Developing Countries: Some Economic Policy Issues

Siddiqui¹

2015

RWE

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This paper analyses the role of foreign capital in the economic development of developing countries, particularly South Asian and East Asian countries. Mainstream economists suggest that foreign investment would benefit developing countries by increasing the availability of capital, and through their positive impact over productivity and the general economic wellbeing of the host country. After the Second World War, the rapid economic growth first of Japan and later on of South Korea, Hong Kong, Singapore, and Taiwan has been widely cited in support of foreign capital. It is true when we look at the records in terms of the removal of poverty, job creation, educational achievements and improving the overall living conditions.

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Economic Reforms, FDI, and Economic Growth in India: A Sector Level Analysis

Cited by 227 publications

References 36 publications

Does FDI Really Matter to Economic Growth in India?

Does FDI Really Matter to Economic Growth in India?

Weakness in Investment Growth: Causes, Implications and Policy Responses

Foreign Capital Investment into Developing Countries: Some Economic Policy Issues

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