Document Type
Article
Publication Date
7-1-2008
Journal / Book Title
World development
Abstract
Booming foreign direct investment (FDI) in post-reform India is widely believed to promote economic growth. We assess this proposition by subjecting industry-specific FDI and output data to Granger causality tests within a panel cointegration framework. It turns out that the growth effects of FDI vary widely across sectors. FDI stocks and output are mutually reinforcing in the manufacturing sector, whereas any causal relationship is absent in the primary sector. Most strikingly, we find only transitory effects of FDI on output in the services sector. However, FDI in the services sector appears to have promoted growth in the manufacturing sector through cross-sector spillovers.
DOI
10.1016/j.worlddev.2007.06.014
MSU Digital Commons Citation
Chakraborty, Chandana and Nunnenkamp, Peter, "Economic Reforms, FDI, and Economic Growth in India Sector Level Analysis" (2008). Department of Economics Faculty Scholarship and Creative Works. 19.
https://digitalcommons.montclair.edu/economics-facpubs/19
Published Citation
Chakraborty, C., & Nunnenkamp, P. (2008). Economic reforms, FDI, and economic growth in India: a sector level analysis. World development, 36(7), 1192-1212.