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Open AccessArticle

Does FDI Really Matter to Economic Growth in India?

Global Strategy Research Center, Korea Trade-Investment Promotion Agency, Seoul 06792, Korea
Department of Economics, University of Alaska Fairbanks, Fairbanks, AK 99775, USA
Author to whom correspondence should be addressed.
Academic Editor: Eric Rougier
Economies 2017, 5(2), 20;
Received: 9 March 2017 / Revised: 1 June 2017 / Accepted: 2 June 2017 / Published: 12 June 2017
(This article belongs to the Special Issue FDI and Development: Emerging Issues)
The main contribution of this article is to examine the productivity spillover effects from India’s inward foreign direct investment (FDI), controlling for trade, in the framework of the cointegrated vector autoregression (CVAR). For this purpose, using the Solow residual approach the aggregate total factor productivity (TFP) in India is estimated to measure FDI-induced spillovers. The results show that the inflow of FDI to India indeed improves TFP growth through positive spillover effects. We also find that trade appears to have a detrimental effect on TFP growth in India. View Full-Text
Keywords: cointegrated VAR; FDI; India; total factor productivity cointegrated VAR; FDI; India; total factor productivity
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Choi, Y.J.; Baek, J. Does FDI Really Matter to Economic Growth in India? Economies 2017, 5, 20.

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