Saturday, 04 Jul, 2020




Does Foreign Direct Investment Lead Economic Growth in India?

International Journal of Financial Management

Volume 3 Issue 2

Published: 2013
Author(s) Name: T.G Saji | Author(s) Affiliation: Assistant Professor, Sri C Achutha Menon Government College, Thrissur, Kerala, India
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This paper investigates the causal relations between foreign direct investment and economic growth in a developing country like India. The analysis has been made under Johansen’s Cointegration framework based on 21 years of data covering the post reform era of the country. The Cointegration analysis finds strong positive relation between FDI and economic growth in India. The study concludes with a suggestion that the policy makers in India should develop investor friendly environment conducive for attracting more amount of capital from the developed world.

Keywords: FDI, Economic Growth, Unit Root, Cointegration

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