Analysis of factors determining the inward FDI in top seven Indian states from top seven source countries using gravity model Online publication date: Wed, 27-Apr-2016
by Ramasamy Murugesan; Murugesan Poovendhan
International Journal of Economics and Business Research (IJEBR), Vol. 11, No. 3, 2016
Abstract: Using gravity model to the analysis of regional factors of FDI inflows into India, this study aims to analyse and determine the attractiveness factors of top 7 receiving Indian states from top seven investing countries' FDI for the period 2004 to 2013. Two econometrics methods were used: OLS estimation and ML-estimation of binary dependent variable models. The results suggest that gross products of host states and source countries, agglomeration effect, capital city advantages, cultural closeness and skilled labour abundance are positively related to the number of foreign firms in a particular Indian state. The distance between host states and source countries is negatively related. As for the resource abundance there is no evidence of an expected positive influence on the dependent variable. The main result of the study is that the necessary condition for FDI presence in a particular Indian states is its economic performance measured by gross regional product.
Existing subscribers:
Go to Inderscience Online Journals to access the Full Text of this article.
If you are not a subscriber and you just want to read the full contents of this article, buy online access here.Complimentary Subscribers, Editors or Members of the Editorial Board of the International Journal of Economics and Business Research (IJEBR):
Login with your Inderscience username and password:
Want to subscribe?
A subscription gives you complete access to all articles in the current issue, as well as to all articles in the previous three years (where applicable). See our Orders page to subscribe.
If you still need assistance, please email subs@inderscience.com