FDI Inflow, Export and Economic Growth Relationship in India: An ARDL-Bound Cointegration Approach

Abstract

There is a debate about the role of Foreign Direct Investment (specially from Developed nations to developing nations) for raising economic growth of the host nation. Some researchers’ support that FDI raises the economic growth of the host country since it brings sophisticated technology, efficient management, raises employment opportunities and fills the gap between domestic savings and investment. Other researchers think that no entrepreneur wants to sacrifice their self interest for interest of a foreign nation. Hence, whatever the positive outcome for FDI inflow put forwarded by MNCs or developed nations ultimately these FDI sucks the main juice of a less developed nations and try to keep a control on the central government of that poor nations. Empirical finding also shows the impacts of FDI on economic growth is not unique. The outcome depends on many factors of the receiving nations. Under these circumstances this paper tries to investigate this FDI inflow, Export and economic growth nexus in the economy of India by applying a newly developed econometric tools ARDL Bound Cointegration Approach.