Abstract
Infrastructure plays important part in economic improvement and sustainable development of the economy. Improvement in quality of infrastructure enhances the efficiency and decreases the cost of production. As per the Global Competitiveness Index, it is believed that improvement in quality of physical infrastructure can increase the investment climate by reducing the cost of total investment and rises the return from investment for both domestic and foreign investor. Thus, the quality of physical infrastructure is a key component on which the multinational companies (MNCs) making their investment decision. Similarly, social infrastructure in terms of health and education, etc. is also perceived as an important determinant of competitiveness of the country as it contributes considerably in the human capital formation. If there is absence of social infrastructure, there is additional expenditure on health and training-related cost which affect negatively on the rate of return from the investment.
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Notes
- 1.
There is a wide empirical literature that has explored relationship between FDI and economic growth. Although there is no consistently strong evidence that FDI inflows promote growth, most of the recent research papers found positive relationship between economic growth and FDI (Kose et al. 2009).
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Jadhav, P., Pani, U., Katti, V. (2020). Foreign Direct Investment in Infrastructure: Evidences from Indian Economy. In: Gupta, A., Dalei, N. (eds) Energy, Environment and Globalization. Springer, Singapore. https://doi.org/10.1007/978-981-13-9310-5_18
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