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Summary: The decisions of foreign investors on technical cooperation versus equity engagements and on the degree of ownership in FDI projects are likely to depend on their relative bargaining position vis-à-vis the host country. We perform negative binominal regressions by making use of a unique dataset on about 24,500 technical cooperation and FDI projects in India by investors from 45 countries of origin over the 1991–2004 period. We find that relative market size, relative financial market development, relative risk, relative endowment of human capital, and previous international experience significantly affect the type of engagement by foreign investors in post-reform India. [ABSTRACT FROM AUTHOR]

Summary: Booming foreign direct investment (FDI) in post-reform India is widely believed to promote economic growth. We assess this proposition by subjecting industry-specific FDI and output data to Granger causality tests within a panel cointegration framework. It turns out that the growth effects of FDI vary widely across sectors. FDI stocks and output are mutually reinforcing in the manufacturing sector, whereas any causal relationship is absent in the primary sector. Most strikingly, we find only transitory effects of FDI on output in the services sector. However, FDI in the services sector appears to have promoted growth in the manufacturing sector through cross-sector spillovers. [Copyright &y& Elsevier]

We analyze the concentration of foreign direct investment (FDI) in India at the district level, based on project-specific location choices since the reform program in the early 1990s. The decomposition property of the Theil index allows us to trace changes over time in the overall concentration of FDI to changes in concentration between and within subgroups of districts. We also differentiate between major types and sources of FDI. We find that FDI concentrated in a persistently decreasing number of districts. Concentration across those districts that received at least one FDI project within a given time interval also increased, but this increase leveled off in the more recent past. These trends hold for essentially all types and sources of FDI, while the average level of concentration varies considerably between these types and sources. [ABSTRACT FROM PUBLISHER]

The paper investigates the role of firm-level productivity and industry-level R&D for multinational enterprises' (MNEs') choice of undertaking foreign direct investment (FDI), and the share of ownership in foreign affiliates. Two firm-specific datasets on German MNEs with varying equity stakes in Indian affiliates are used to account for the two-step decision process. The paper also analyses how German firm decisions were affected by the liberalisation of FDI regulations in India. Results show remarkable differences between the selection and the ownership share equation, and also between the pre-reform and post-reform periods. The evidence clearly reveals the trade-offs involved in selective FDI approvals and foreign ownership restrictions. [ABSTRACT FROM AUTHOR]