IDEAS home Printed from https://ideas.repec.org/a/vrs/zirebs/v26y2023i1p55-75n1003.html
   My bibliography  Save this article

Nexus between Macro Economic Variables and Foreign Direct Investment (FDI) Inflows in India: Evidence from Time Series Analysis

Author

Listed:
  • Hamid Ishfaq

    (MICA-The School of Ideas, Ahmedabad, 380058, India.)

Abstract

India’s FDI situation is presently seeing a steady move with liberalized reforms over the recent couple of years and an alluring investment atmosphere having a beneficial outcome of the inflows. The main purpose of this study is to determine the nexus between macroeconomic variables and Foreign Direct Investment inflows in India from 1980 to 2016, applying the Autoregressive Distributed Lag (ARDL) testing approach to co-integration and the Toda Yamamoto Granger Causality test to draw inferences. The empirical results reveal a long-run association between Gross Domestic Product and Foreign Direct Investment Inflows. The findings also demonstrate that the causality test validates the causal relationship between foreign direct investment and all economic variables under study, except the Exchange rate and Consumer price index. However, the Toda Yamamoto test divulges bi-directional causality between Gross Domestic Product and Foreign Direct Investment Inflows. Policy makers are essential to pushing the reform agenda in the local market to pull more FDI into the Indian economy.

Suggested Citation

  • Hamid Ishfaq, 2023. "Nexus between Macro Economic Variables and Foreign Direct Investment (FDI) Inflows in India: Evidence from Time Series Analysis," Zagreb International Review of Economics and Business, Sciendo, vol. 26(1), pages 55-75.
    • Handle: RePEc:vrs:zirebs:v:26:y:2023:i:1:p:55-75:n:1003
    DOI: 10.2478/zireb-2023-0003
    as

    Download full text from publisher

    File URL: https://doi.org/10.2478/zireb-2023-0003
    Download Restriction: no
    File URL: https://libkey.io/10.2478/zireb-2023-0003?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Keywords

    FDI Inflows; Macroeconomic factors; ARDL; Granger causality; India;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:vrs:zirebs:v:26:y:2023:i:1:p:55-75:n:1003. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Peter Golla (email available below). General contact details of provider: https://www.sciendo.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.