Title: Financial determinants of outward foreign direct investment: evidence from India

Authors: Mariam Jamaleh; Abha Shukla

Addresses: Faculty of Economics, Tartous University, Tartous, Syria ' Department of Commerce, Faculty of Commerce and Business Studies, University of Delhi, New Delhi, India

Abstract: This study tests the impact of firm-level financial factors on the real internationalisation of emerging multinationals. We postulate that market timing strategies which exploit temporarily available low cost capital, along with financial internationalisation strategies employed to overcome the underdeveloped institutional environment in emerging markets, play a positive role in facilitating FDI by emerging multinationals. We apply Pooled Tobit estimates on data of outward FDI by Indian multinationals during the period 2008-2019. The empirical evidence does not support a mispricing effect on outward FDI by Indian multinationals. However, attempts to achieve financial internationalisation through foreign independent directors and foreign institutional investors are proven to facilitate their real internationalisation. Both findings resonate with observations from the analysis that indicates heavy dependence on international capital markets as a source of funding for Indian outward FDI.

Keywords: emerging multinationals; market timing; financial internationalisation; real internationalisation; India.

DOI: 10.1504/GBER.2025.145249

Global Business and Economics Review, 2025 Vol.32 No.3, pp.282 - 297

Received: 27 Jan 2023
Accepted: 10 Jun 2023
Published online: 31 Mar 2025 *

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