IDEAS home Printed from https://ideas.repec.org/p/ess/wpaper/id8694.html
   My bibliography  Save this paper

Foreign Direct Investment and Poverty Reduction: India in Regional Context

Author

Listed:
  • Manmohan Agarwal
  • Pragya Atri

Abstract

It is widely proclaimed that capital account liberalisation would immensely benefit developing economies because once capital controls are lifted capital would flow from the capital abundant rich countries to the capital scarce developing countries. This free movement of capital could possibly increase growth thereby lifting millions out of poverty. India has been gradually liberalising since the 1980s and throughout more capital inflows were observed compared to outflows. Also, the composition of capital flows has been changing since the 1980s – with foreign direct investment (FDI) inflows rising steadily post 1991compared to portfolio and debt flows. However, since 2000, FDI outflows from India have also been witnessed. In this discussion paper, we empirically test the impact of FDI flows on poverty in India for the period 1980-2011. To provide a perspective to India’s performance we also analyse the link between FDI flows and poverty for SAARC countries. For a better understanding of how FDI flows impact poverty, we analyse the outflows and inflows separately. Interestingly, we find that in India FDI inflows contribute to increases in poverty whereas for other SAARC countries they significantly reduce poverty. The impact of FDI outflows in India too is in complete contrast with other SAARC countries. While FDI outflows significantly reduce poverty in India, they turn out to be insignificant for other regional countries.

Suggested Citation

  • Manmohan Agarwal & Pragya Atri, 2016. "Foreign Direct Investment and Poverty Reduction: India in Regional Context," Working Papers id:8694, eSocialSciences.
  • Handle: RePEc:ess:wpaper:id:8694
    Note: Institutional Papers
    as

    Download full text from publisher

    File URL: http://www.esocialsciences.org/Articles/show_Article.aspx?acat=InstitutionalPapers&aid=8694
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Wani, Mr. Nassir Ul Haq & Rehman, Mr. Noor, 2017. "Determinants of FDI in Afghanistan: An Empirical Analysis," MPRA Paper 81975, University Library of Munich, Germany, revised 03 May 2016.
    2. Sodiq Arogundade & Mduduzi Biyase & Santos Bila, 2022. "Be Nice to Thy Neighbors: Spatial Impact of Foreign Direct Investment on Poverty in Africa," Economies, MDPI, vol. 10(6), pages 1-20, June.

    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:ess:wpaper:id:8694. 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: Padma Prakash (email available below). General contact details of provider: http://www.esocialsciences.org .

    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.