Does FDI Generate Economic Growth? Evidence from The Indian Economy
DOI:
https://doi.org/10.33516/maj.v56i4.32-35pKeywords:
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This research paper assesses the longrun relationship as well as the bidirectional causality between economic growth and Foreign Direct Investment (FDI) for an emerging economy like India. We employ the Autoregressive Distributed Lag (ARDL) and the Toda-Yamamoto causality test on the annual time series for the period 1971-2019. The ARDL bounds test results show that there is a long-run relationship between economic growth and FDI. The causality test suggests the existence of a bidirectional relationship between the two series. Our results are in conformity with those of India Brand Equity Foundation (IBEF) which documents that FDI acts a catalyst of economic growth for India.Downloads
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