Title: FDI in India and its economic effects on service industry

Authors: Yin Feng

Addresses: Department of Finance, College of International Business and Management, Shanghai University, 99 Shangda Road, Baoshan District, 200444 Shanghai, People's Republic of China

Abstract: Utilising time series data on Foreign Direct Investment (FDI) inflow, exports and outputs in service industry, co-integration, Vector Auto-Regression (VAR) and causality analyses are conducted on the basis of aggregated data that are available for the period 1991-2007. The empirical results indicate that there exist long-run co-integrating relationships between FDI and service exports and outputs in India; whereas FDI inflow appears to have no significant impact on service exports and outputs performance, there is no evidence of long-run causal links between FDI inflow and service exports and outputs in service industry, and there is only a weak long-run causality running from output of services to FDI.

Keywords: FDI; foreign direct investment; service industry; service exports; service outputs; India; services.

DOI: 10.1504/IJTGM.2009.025388

International Journal of Trade and Global Markets, 2009 Vol.2 No.2, pp.179 - 193

Published online: 21 May 2009 *

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