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Home country impact on Outward FDI from India

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  • Nayyar, Rishika
  • Mukherjee, Jaydeep

Abstract

The altering policy environment in emerging markets and the surge in their outward foreign direct investment (OFDI) calls for an empirical investigation. Accordingly, this paper examines the effect of home country macroeconomic conditions and Government policies on the OFDI flows from India during the period 1984 to 2015. Incorporating the structural breaks in the empirical model, results indicate the existence of a long-run relationship between OFDI flows and home country macroeconomic and Government policies. Government policies relating to foreign trade and investment and financial sector development are found to be significant determinants. The results also suggest the need for the Government to enhance its effort on the development of knowledge infrastructure in order to support the OFDI from India's manufacturing sector and thereby contribute to the success of “Make in India” programme. Policy implications are discussed.

Suggested Citation

  • Nayyar, Rishika & Mukherjee, Jaydeep, 2020. "Home country impact on Outward FDI from India," Journal of Policy Modeling, Elsevier, vol. 42(2), pages 385-400.
    • Handle: RePEc:eee:jpolmo:v:42:y:2020:i:2:p:385-400
    DOI: 10.1016/j.jpolmod.2019.06.006
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    Cited by:

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    2. Prajukta Tripathy & Pragyanrani Behera & Bikash Ranjan Mishra, 2023. "Study of linkages between productivity, export, and outward foreign direct investment: An empirical perspective of Indian manufacturing industries," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 28(2), pages 1527-1548, April.
    3. Garg, Shamita & Sushil,, 2022. "Impact of de-globalization on development: Comparative analysis of an emerging market (India) and a developed country (USA)," Journal of Policy Modeling, Elsevier, vol. 44(6), pages 1179-1197.
    4. Nathapornpan Piyaareekul Uttama & Rapipong Promnart, 2022. "Shadow economy and the efficiency of FDI inflow: the case of ASEAN economies," International Journal of Economics and Business Research, Inderscience Enterprises Ltd, vol. 23(2), pages 136-155.
    5. K Esakki Muthu & K Rajamannar, 2020. "A Study on Impact of Make in India in Indian Foreign Direct Investment," Shanlax International Journal of Economics, Shanlax Journals, vol. 8(2), pages 54-58, March.
    6. Huiying Zhang & Yikang Liu, 2022. "Do Foreign Direct Investment and Migration Influence the Sustainable Development of Outward Foreign Direct Investment? From the Perspective of Intellectual Property Rights Protection," Sustainability, MDPI, vol. 14(9), pages 1-18, April.
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    8. Nadia Doytch, 2021. "Who Gains from Services FDI—Host or Home Economies? An Analysis of Disaggregated Services FDI Inflows and Outflows of 24 European Economies," Foreign Trade Review, , vol. 56(3), pages 257-288, August.

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    More about this item

    Keywords

    Foreign direct investment; India; Policy; Make in India;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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