A Causality Linkage Analysis of Foreign Direct Investment, International Trade and Economic Growth in India
Published: 2019
Author(s) Name: Tanvi Bhalala |
Author(s) Affiliation: Assist.Prof., Prof. V.B. shah Inst. of Mgt., affiliated to Veer Narmad South Gujarat Univ., Gujarat
Locked
Subscribed
Available for All
Abstract
This study has investigated short run causality among foreign direct investment,
international trade and economic growth of India during 2000 to 2018 adopting
Toda – Yamamoto (1995) modified Granger causality approach under VAR
model. The quarterly data of foreign direct investment, export and gross
domestic product are used for this study. Initially, the Augmented Dickey-Fuller
test and Phillip-Perron test has been used to evaluate stationarity. Along with it,
Perron Innovational Outlier and Additive Outlier model used to find out
structural break point. As the variables under study have mixed order of
integration, Toda – Yamamoto (1995) modified Granger causality test has been
used for determining direction of causal linkage. The empirical results are
indicating uni-directional causality from foreign direct investment to export and
from gross domestic product to export in India.
Keywords: Foreign Direct Investment, Exports, Stationarity, Causality, Structural Break.
View PDF