Title: India's outward foreign direct investment: the home-country economic perspective

Authors: Munmi Saikia; Saundarjya Borbora

Addresses: Indian Institute of Technology Guwahati, 781039, Assam, India ' Indian Institute of Technology Guwahati, 781039, Assam, India

Abstract: The paper examines the impact of home-country macroeconomic factors such as gross domestic product (GDP), money supply and inflation on the growth of outward foreign direct investment (OFDI) from India. Vector error correction model is employed to explore the long-run dynamics and short-run causality between the macroeconomic factors and OFDI for the period 1980-2014. The study finds that GDP has positive and significant impact on OFDI whereas money supply and inflation have significant but negative impact on it in the long-run. However, in the short-run, no causality is witnessed between OFDI and macroeconomic factors specified in the model.

Keywords: outward foreign direct investment; OFDI; macroeconomic factor; vector error correction model; VECM; India.

DOI: 10.1504/IJCM.2018.093300

International Journal of Comparative Management, 2018 Vol.1 No.2, pp.162 - 184

Received: 02 Nov 2017
Accepted: 15 Mar 2018

Published online: 24 Jul 2018 *

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