Foreign Direct Investment, Export and Economic Growth in India: An Application of Ardl Model

Asian African Journal of Economics and Econometrics, Vol.10, No.2, 245-259, 2010

15 Pages Posted: 2 May 2013

See all articles by Durairaj Kumarasamy

Durairaj Kumarasamy

Consultant, ASEAN India Centre, Research and Information System for Developing Countries

Date Written: 2010

Abstract

This study examines the causal nexus among Export, Economic Growth and Foreign Direct Investment (FDI) in India using the autoregressive distributed lag (ARDL) cointegration procedure on monthly data over the period 1992 to 2008. The stability of the short-run as well as long-run coefficients in the model is tested too. The analysis reveals a long run interrelationship among Export, Economic Growth and FDI in India. In the short run the study find the evidence of bidirectional relationship between Export and Economic Growth and a unidirectional causal relationship from Export to FDI. As a result, during the post liberalization period, trade liberalization has not only caused trade expansion but also increased the inflow of FDI in India which stimulate economic growth.

Keywords: Foreign Direct Investment, Export, Economic Growth, ARDL

JEL Classification: F21, F43

Suggested Citation

Kumarasamy, Durairaj, Foreign Direct Investment, Export and Economic Growth in India: An Application of Ardl Model (2010). Asian African Journal of Economics and Econometrics, Vol.10, No.2, 245-259, 2010, Available at SSRN: https://ssrn.com/abstract=2259234

Durairaj Kumarasamy (Contact Author)

Consultant, ASEAN India Centre, Research and Information System for Developing Countries ( email )

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