IDEAS home Printed from https://ideas.repec.org/p/ags/yaleeg/28372.html
   My bibliography  Save this paper

Export Growth In India: Has FDI Played a Role?

Author

Listed:
  • Sharma, Kishor

Abstract

Export growth in India has been much faster than GDP growth over the past few decades. Several factors appear to have contributed to this phenomenon including foreign direct investment (FDI). However, despite increasing inflows of FDI especially in recent years there has not been any attempt to assess its contribution to India's export performanceone of the channels through which FDI influences growth. Using annual data for 1970-98 we investigate the determinants of export performance in India in a simultaneous equation framework. Results suggest that demand for Indian exports increases when its export prices fall in relation to world prices. Furthermore, the real appreciation of the rupee adversely effects India's exports. Export supply is positively related to the domestic relative price of exports and higher domestic demand reduces export supply. Foreign investment appears to have statistically no significant impact on export performance although the coefficient of FDI has a positive sign.

Suggested Citation

  • Sharma, Kishor, 2000. "Export Growth In India: Has FDI Played a Role?," Center Discussion Papers 28372, Yale University, Economic Growth Center.
    • Handle: RePEc:ags:yaleeg:28372
    DOI: 10.22004/ag.econ.28372
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/28372/files/dp000816.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.28372?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
    ---><---

    References listed on IDEAS

    as
    1. Brahmbhatt, Milan & Srinivasan, T.G. & Murrell, Kim, 1996. "India in the global economy," Policy Research Working Paper Series 1681, The World Bank.
    2. Balasubramanyam, V N & Salisu, M & Sapsford, David, 1996. "Foreign Direct Investment and Growth in EP and IS Countries," Economic Journal, Royal Economic Society, vol. 106(434), pages 92-105, January.
    3. Tain-jy Chen & Yi-Ping Chen, 1995. "Foreign Direct Investment," Industry and Innovation, Taylor & Francis Journals, vol. 2(1), pages 57-68.
    4. Chen, Chung & Chang, Lawrence & Zhang, Yimin, 1995. "The role of foreign direct investment in China's post-1978 economic development," World Development, Elsevier, vol. 23(4), pages 691-703, April.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Yao, Shujie & Wei, Kailei, 2007. "Economic growth in the presence of FDI: The perspective of newly industrialising economies," Journal of Comparative Economics, Elsevier, vol. 35(1), pages 211-234, March.
    2. Y. Wu, 1998. "The Performance of Foreign Direct Investment in China: A preliminary analysis," Economics Discussion / Working Papers 98-06, The University of Western Australia, Department of Economics.
    3. Liu, Xiaming & Parker, David & Vaidya, Kirit & Wei, Yingqi, 2001. "The impact of foreign direct investment on labour productivity in the Chinese electronics industry," International Business Review, Elsevier, vol. 10(4), pages 421-439, August.
    4. Yalta, A. Yasemin, 2013. "Revisiting the FDI-led growth Hypothesis: The case of China," Economic Modelling, Elsevier, vol. 31(C), pages 335-343.
    5. Ran, Jimmy & Voon, Jan P. & Li, Guangzhong, 2007. "How does FDI affect China? Evidence from industries and provinces," Journal of Comparative Economics, Elsevier, vol. 35(4), pages 774-799, December.
    6. Facchini, Giovanni & Liu, Maggie Y. & Mayda, Anna Maria & Zhou, Minghai, 2019. "China's “Great Migration”: The impact of the reduction in trade policy uncertainty," Journal of International Economics, Elsevier, vol. 120(C), pages 126-144.
    7. Jeon, Yongbok & Park, Byung Il & Ghauri, Pervez N., 2013. "Foreign direct investment spillover effects in China: Are they different across industries with different technological levels?," China Economic Review, Elsevier, vol. 26(C), pages 105-117.
    8. Mah, Jai S., 2010. "Foreign direct investment inflows and economic growth of China," Journal of Policy Modeling, Elsevier, vol. 32(1), pages 155-158, January.
    9. Yip, Paul S.L. & Yao, S.T., 2006. "Removing foreign direct investment's exchange rate risk in developing economies: the case for a foreign exchange custodian board," International Review of Economics & Finance, Elsevier, vol. 15(3), pages 294-315.
    10. Kishor Sharma, 2000. "Export Growth in India: Has FDI Played a Role," Working Papers 816, Economic Growth Center, Yale University.
    11. Elsiddig Yousif Mohammed Mousa, 2019. "Analytical Study of Factors Affecting Investment in Saudi Arabia from the Period of 1990- 2017," International Journal of Applied Economics, Finance and Accounting, Online Academic Press, vol. 4(1), pages 10-14.
    12. Chun-Hung Lin & Chia-Ming Lee & Chih-Hai Yang, 2011. "Does foreign direct investment really enhance China's regional productivity?," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 20(6), pages 741-768, August.
    13. Robert Alexander & Rui-cong Sang & Sajid Anwar, 2016. "Regional Policy and Industrial Relocation in China: A Panel Data Analysis," EcoMod2016 9277, EcoMod.
    14. Sebastian Claro, 2009. "FDI Liberalization as a Source of Comparative Advantage in China," Review of Development Economics, Wiley Blackwell, vol. 13(4), pages 740-753, November.
    15. Bhabani Shankar Nayak & Zhong Yingnan, 2019. "Critical Reflections on Different Trends in the Relationship between Financial Developments and Economic Growth in China," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 11(3), pages 89-98, March.
    16. Anwar, Sajid & Sun, Sizhong, 2012. "FDI and market entry/exit: Evidence from China," Journal of Asian Economics, Elsevier, vol. 23(5), pages 487-498.
    17. He, Jie, 2006. "Pollution haven hypothesis and environmental impacts of foreign direct investment: The case of industrial emission of sulfur dioxide (SO2) in Chinese provinces," Ecological Economics, Elsevier, vol. 60(1), pages 228-245, November.
    18. Andrés Rodríguez‐Pose & Min Zhang, 2019. "Government institutions and the dynamics of urban growth in China," Journal of Regional Science, Wiley Blackwell, vol. 59(4), pages 633-668, September.
    19. Doytch, Nadia & Uctum, Merih, 2019. "Spillovers from foreign direct investment in services: Evidence at sub-sectoral level for the Asia-Pacific," Journal of Asian Economics, Elsevier, vol. 60(C), pages 33-44.
    20. Yang Li & Shin-Yi Chen, 2010. "The Impact of FDI on the Productivity of Chinese Economic Regions," Asia-Pacific Journal of Accounting & Economics, Taylor & Francis Journals, vol. 17(3), pages 299-312.

    More about this item

    Keywords

    International Relations/Trade;

    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:ags:yaleeg:28372. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/egyalus.html .

    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.