A Macroeconomic Approach to Foreign Investment Flows in India

Authors

  •   Sonia Chawla Professor and Head, Department of Business Management, D.A.V Institute of Engineering & Technology, Jalandhar, Punjab
  •   Priyanka Sharma Assistant Professor, Department of Business Management, D.A.V Institute of Engineering & Technology, Jalandhar, Punjab

DOI:

https://doi.org/10.17010/ijf/2014/v8i5/71917

Keywords:

FDI

, FII, GDP, Inflation, Interest Rate

E2

, F4, F61

Paper Submission Date

, June 16, 2013, Paper sent back for Revision, August 24, Paper Acceptance Date, December 27, 2013.

Abstract

The Indian economy, a developing economy and an attractive destination for foreign investment, has witnessed many ups and downs in its growth since its liberalization in 1991. Foreign investment in India has increased continuously since 1990-91 to 2010-11. Studies have shown that the major investment of FDI in India has been in the services sector. The movement of FDI and FIIs in India is affected by many macroeconomic variables like inflation, GDP, money supply, IIP, WPI, exchange rate, balance of trade, and so forth. The present paper conducts a review of studies in this area so as to establish a relation between macroeconomic variables and the inflow of foreign investment in India.

Downloads

Download data is not yet available.

Downloads

Published

2014-05-01

How to Cite

Chawla, S., & Sharma, P. (2014). A Macroeconomic Approach to Foreign Investment Flows in India. Indian Journal of Finance, 8(5), 42–49. https://doi.org/10.17010/ijf/2014/v8i5/71917

Issue

Volume 8, Issue 5, May 2014

Section

Articles
Crossref
Scopus
Google Scholar
Europe PMC

References

Azam, M., Khan, H., Hunjra, A. I., Ahmad, H.M., & Chani, M.I. (2011). Institutions, macroeconomic policy factors and foreign direct investment: South Asian countries case. African Journal of Business Management, 5 (11), 4306-4313.

Chaturvedi, I. (2011). Role of FDI in economic development in India: Sectoral analysis. International Conference on Technology and Business Management, March 28-20, 2011.

Chellaswamy, P., & Udhayakumar, J. (2007). Foreign institutional investors in India. Indian Journal of Finance, 1 (5), 38-43.

Dumludag, D., & Sukruoglo, D. (2007). The impact of macroeconomic and institutional variables on Foreign direct investment flows in emerging markets. IIBF Dergisi, 23, 133-166.

Indian economy overview ( June, 2011). [web log post]. Retrieved from http://archbhoo-india.blogspot.in/2012/06/indian-economy-overview-2012-un.html

Jayachandran, G., & Seilan, A. (2010). A causal relationship between trade, foreign direct investment and economic growth for India. International Research Journal of Finance and Economics, Issue 42, 74- 89.

Kaur, M., & Dhillon, S. S. (2010). Determinants of foreign institutional investors' investment in India. Eurasian Journal of Business Economics, 3 (6), 57-70.

Kohli, R. (2001). Capital flows and their macroeconomic effects in India. Indian Council for Research on International Economic Relations, Working Paper no.64. Retrieved from http://icrier.org/pdf/renu64.PDF

Kumar, R. (2011). Determinants of FIIs in India: Evidence from granger causality test. South Asian Journal of Marketing and Management Research, 1 (1), 61-68.

Lahiri, H. (2012). Foreign portfolio investment in India and plausible exchange rate and interest rate regimes: Policy options open to the RBI. Contemporary Issues and Ideas in Social Sciences, 7, 1-33.

Masood, T., & Ahmad, M.I. (2009). Macroeconomic implications of capital inflows in India. International Review of Business Research Papers, 5 (6), 133-147.

National Council of Applied Economic Research. (2009). FDI in India and its growth linkages. Retrieved from http://dipp.nic.in/english/publications/reports/fdi_ncaer.pdf

Niazi, G.S.K., Riaz, S., Naseem, M.A., & Rehman, R.U. (2011). Does an inflation and growth of a country affect its foreign direct investment? Journal of Management, Economics and Finance, 1(1), 84-90.

Omojevwe, Z. E., & Sekar, C. (2012). Comparison of the economic factors that influence foreign direct investment growth in Nigeria and India. Journal of Agriculture and Social Research (JASR), 12 (1), 99-107.

Prasanna, K. P. (2008). Foreign institutional investors: Investment preferences in India. Journal of Administration and Governance, 3 (2), 40-51.

Ray, S. (2012). Impact of foreign direct investment on economic growth in India: A cointegration analysis. Advances in Information Technology & Management, 2 (1), 187-201.

Reserve Bank of India. (RBI). (2011). Foreign investment flows. Retrieved from

Sector wise distribution of FDI equity inflows (n.d.). Retrieved from http://dipp.nic.in/English/Publications/FDI_Statistics/SECTOR-WISE-INFLOWS.pdf

Sethi, N., & Patnaik, K. U. S. (2007). Impact of international capital flows on India's economic growth-in view of changing financial market. The Indian Journal of Economics , 88(348).

Sethi, N., & Sucharita (2010). Impact of private foreign capital inflows on economic growth in India: An empirical investigation. Journal of Social and Economic Policy, 7 (2), 143-160.

Suresh, A. (2012). Sensitivity of capital flows vis-a-vis interest rate differentials: An empirical assessment for India. Zenith: International Journal of Multidisciplinary Research, 2 (3), 74-93.

Tiwari, A. K. (2011). Economic growth and FDI in Asia: A panel-data approach. Economic Analysis and Policy, 41 (42), 173-187.