Abstract
The objective of the present study is to analyse the pattern of movement of external capital flows to Indian economy in terms of foreign direct investment (FDI) along with other macroeconomic indicators, namely, real GDP, US dollar exchange rate, inflation, T-bill rate, trade openness, and Dow Jones Index value, and their probable impact on the financial and overall performance of the economy. Given that the current study period is from 1997–98 to 2013–14, and the tremendous growth in terms of external capital inflows in India during that time simultaneously with near double digit economic growth, the focus of the chapter is primarily to unravel the linkage between the FDI inflows and the selected macroeconomic fundamentals with the help of quarterly time series data using cointegration and causality analysis.
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Notes
- 1.
Average rate of inflation (based on WPI) was 4.9 % during the Ninth Plan (1997–98 to 2001–02) and 4.8 % during the Tenth Plan (up to January, 2006) [Source: Economic Survey of India 2006–07: http://indiabudget.nic.in/es2006-07/esmain.htm].
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Bhattacharya, B., Mukherjee, J. (2016). Foreign Direct Investment and Macroeconomic Indicators in India: A Causality Analysis. In: Roy, M., Sinha Roy, S. (eds) International Trade and International Finance. Springer, New Delhi. https://doi.org/10.1007/978-81-322-2797-7_18
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