1. Do FDI and public investment crowd in or crowd out private domestic investment in India
- Author
-
Rath, Badri Narayan and Bal, Debi Prasad
- Subjects
India -- Domestic policy ,Foreign investments -- Analysis -- Economic aspects ,Economic growth -- Analysis ,Value-added resellers -- Economic aspects ,VAR ,Business ,Economics ,Business, international ,Regional focus/area studies - Abstract
This paper examines the dynamic relationship between Private Domestic Investment (PDI), Foreign Direct Investment (FDI) and Public Investment (PU) in India for the period 1978-79 to 2009-10. Zivot and Andrews test has been used to know the structural break points in the data series. The empirical results derived from structural VAR model indicate that FDI has crowding in effects on PDI, whereas, PU neither 'crowd out' nor 'crowd in' PDI. Further, we found the evidence that shocks in PU and PDI have positively improved the FDI inflows in India. JEL Classifications: C32; E22; E62; F21 Keywords: Investment; Crowding Out; Crowding in, Structural VAR; Zivot and Andrews Unit Root, India, INTRODUCTION Both public investment and private investment has played a crucial role for the sustainable growth and development in India. The Foreign Direct Investment (FDI) also has its own importance [...]
- Published
- 2014