Abstract

Determinants of Foreign Direct Investment has remained an exhaustive endeavour for the researchers and at times it becomes a Pollyanna for policy making. The present piece of research is an attempt to gauge the determinants of FDI for India and Sri Lanka. The plausible determinants are selected for empirical testing such as Market Size, Inflation, Trade Openness and Current Account Balance. Proxy variables are selected in case the determinant is not measured in itself. Augmented Dicky Fuller test (Dicky & Fuller, 1981) is used for checking stationary and for hypotheses testing Ordinary Least Squares Regression is used. JEL: C13, E22, F21, F23

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