Do the FDI, Economic growth and Trade affect each other for India: An ARDL Approach
Anshul Singh
MPRA Paper from University Library of Munich, Germany
Abstract:
This paper examines the dynamic causal relationships between foreign direct investment (FDI), trade and economic growth in India by applying the bounds testing (ARDL) approach to cointegration for the period from 1970 to 2012. The bounds tests suggest that the variables of interest are bound together in the long-run when GDP per capita is the dependent variable. The empirical findings confirm that there is bi-directional Granger causality between FDI and trade, unidirectional Granger causality running from FDI to economic growth and from economic growth to capital investment but there is no Granger causality from economic growth to FDI and capital investment to per capita GDP.
Keywords: FDI; trade openness; economic growth; ARDL cointegration; ECM; India (search for similar items in EconPapers)
JEL-codes: C22 F13 F21 (search for similar items in EconPapers)
Date: 2013-11-10
New Economics Papers: this item is included in nep-fdg
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:51447
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