Title: Determinants of FDI and competitive federalism in India

Authors: Prashant I. Vadikar; Hardik B. Bhadeshiya

Addresses: Department of Business Economics, Faculty of Commerce, The Maharaja Sayajirao University of Baroda, Vadodara, Gujarat, IN, India ' Department of Commerce and Business Management, Faculty of Commerce, The Maharaja Sayajirao University of Baroda, Vadodara, Gujarat, IN, India

Abstract: The state's attempts to draw FDI are critical if India is to see rapid economic growth. States are working to improve governance as a result of the competitive and collaborative federalism strategy that New India has taken to attain its goals. Panel data regression has been employed in the study to objectively evaluate the influence of socio-economic and political variables on FDI. The results demonstrate that, in the short term, the economy's digitalisation is the most critical element in luring FDI inflow for States and UTs. Only e-readiness or digitalisation has an immediate impact on FDI inflow since other resources are mobile between states and are manageable. Business ease is immediately impacted by digitalisation. The states should work to improve the digital infrastructure, digital literacy and e-governance.

Keywords: foreign direct investment; FDI; competitive federalism; India; states.

DOI: 10.1504/IJBG.2025.148063

International Journal of Business and Globalisation, 2025 Vol.41 No.1, pp.75 - 89

Received: 15 Aug 2022
Received in revised form: 03 Jan 2023
Accepted: 04 Jan 2023
Published online: 25 Aug 2025 *

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