GDP and Outward Foreign Direct Investment from India: Co-Integration and Causality Test
Dikshita Kakoti1, Runumi Das2, Puja Agarwal3
1Dikshita Kakoti, Assistant professor Mahapurush Srimanta Sankardev Viswavidyalaya, Nagaon, Assam.
2Runumi Das, Assistant Professor Pandu College, Guwahati Assam.
3Puja Agarwal, Assistant professor Naharkatiya College, Dibrugarh Assam.
Manuscript received on October 11, 2019. | Revised Manuscript received on 22 October, 2019. | Manuscript published on November 10, 2019. | PP: 2436-2439 | Volume-9 Issue-1, November 2019. | Retrieval Number: A4504119119/2019©BEIESP | DOI: 10.35940/ijitee.A4504.119119
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© The Authors. Blue Eyes Intelligence Engineering and Sciences Publication (BEIESP). This is an open access article under the CC-BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/)
Abstract: India’s outward foreign direct investment has experienced a Dynamic change over last decade after the liberalisation and globalisation of Indian economy that further achieves economic expansion and development in recent years. Approximately seven percent growth rate is witness by India from 1993-2011.This period also witnessed upward trend of outbound investment from India. UNCTAD (2015) has also nailed India as one of the leading outward investing economies. But a very few works have been done for exploring the long run relationship between outward FDI and GDP in context of the emerging economies like India. With this backdrop, the present study empirically investigates the long run and short run co – integrating relationship between India’s GDP and OFDI. For empirical analysis various econometric tools like test of stationarity, Engle granger co-integration ( as we have consider only two macro variables) and ECM model is used to test the causal association between the selected variables. It is found that there is long run causal relationship among OFDI and India’s Growth rate. The results found that no short term causal association among India’s OFDI and GDP by reflecting the fact that there are other factors which have influence on OFDI flows.
Keywords: GDP, Outward FDI, Growth.
Scope of the Article: System Integration