Determinates of Foreign Direct Investment: An Empirical Study on India

Abstract

Now a days, Foreign Direct Investment (FDI) is a buzz word for the developing countries not only to strengthen their Balance of Payment (BOP) account but also to accelerate overall economic growth of the countries. It also helps to generate employment in the country with new knowledge and knowhow. Naturally, it is very important for the policy makers of the respective countries to identify the key determinants which attracts more FDI and fine tune their policies to take comparative advantage in the competitive world. In this study the researchers tried to identify the important determinants of inflow FDI in Indian context. It is observed that some prominent determinants are existing to attract more FDI.  However, government policies and restrictions are impediments to such inflow and these are regarded as moderating variables in this study. The statistical result also shows that services sectors and computer hardware and software are the significant areas where determinants of Foreign Direct Investment (FDI) inflows in Indian economy growth