Bilateral Foreign Direct Investment and Foreign Trade in India: Are They Substitutes or Complementary?

Asian Economic Review, Vol. 53, No.2, August, 2011, pp.250-269

14 Pages Posted: 2 May 2013

See all articles by Durairaj Kumarasamy

Durairaj Kumarasamy

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

Nirmala Velan

Pondicherry Central University

Abstract

This paper attempts to test the hypothesis of complementary/substitution relationship between Foreign Direct Investment (FDI) and foreign trade in India with here selected trade partners using co-integration technique and error correction framework. The data used are quarterly from 1992 II to 2009 III. The analysis revealed mixed results, but mostly supporting the substitution relationship with here trade partners. The findings support the observation that most FDI inflows in India are domestic market-oriented and market-seeking in nature

Keywords: Foreign Direct Investment, Foreign Trade, India

JEL Classification: F21, F31

Suggested Citation

Kumarasamy, Durairaj and Velan, Nirmala, Bilateral Foreign Direct Investment and Foreign Trade in India: Are They Substitutes or Complementary?. Asian Economic Review, Vol. 53, No.2, August, 2011, pp.250-269, Available at SSRN: https://ssrn.com/abstract=2259250

Durairaj Kumarasamy (Contact Author)

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

India Habitat Centre
Lodhi Road
New Delhi, 110 003
India
8287254499 (Phone)
8287254499 (Fax)

HOME PAGE: http://www.ris.org.in

Nirmala Velan

Pondicherry Central University ( email )

Pondicherry 605 014
India

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
16
Abstract Views
272
PlumX Metrics