Economic Reforms, FDI, and Economic Growth in India: A Sector Level Analysis
Booming foreign direct investment (FDI) in post-reform India is widely believed to promote economic growth. We assess this proposition by subjecting industry-specific FDI and output data to Granger causality tests within a panel cointegration framework. It turns out that the growth effects of FDI va...
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| Veröffentlicht in: | World development 2008-07, Vol.36 (7), p.1192-1212 |
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| creator | Chakraborty, Chandana Nunnenkamp, Peter |
| description | Booming foreign direct investment (FDI) in post-reform India is widely believed to promote economic growth. We assess this proposition by subjecting industry-specific FDI and output data to Granger causality tests within a panel cointegration framework. It turns out that the growth effects of FDI vary widely across sectors. FDI stocks and output are mutually reinforcing in the manufacturing sector, whereas any causal relationship is absent in the primary sector. Most strikingly, we find only transitory effects of FDI on output in the services sector. However, FDI in the services sector appears to have promoted growth in the manufacturing sector through cross-sector spillovers. |
| doi_str_mv | 10.1016/j.worlddev.2007.06.014 |
| format | Article |
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| identifier | ISSN: 0305-750X |
| ispartof | World development, 2008-07, Vol.36 (7), p.1192-1212 |
| issn | 0305-750X 1873-5991 |
| language | eng |
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| source | RePEc; PAIS Index; Elsevier ScienceDirect Journals |
| subjects | Causality Cointegration Cointegration analysis Economic conditions Economic development Economic growth Economic policy Economic reform Foreign direct investment Foreign investment Foreign investments growth effects India Manufacturers Manufacturing Studies |
| title | Economic Reforms, FDI, and Economic Growth in India: A Sector Level Analysis |
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