Economic Growth Indicators and FDI effect in Indian Economies : Evidence from a Panel and OLS

Abstract

    Foreign Direct Investment (FDI) is store stream between the nations as inflow or outpouring by which one can ready to increase some profit by their investment though another can abuse the chance to upgrade the profitability and discover better position through execution. The adequacy and proficiency relies on the financial specialists observation, on the off chance that investment with the end goal of long haul, at that point it contributes decidedly towards the economy. The study analyzed to assess empirically, the relationship between FDI and economic growth in India with the indicators of the Gross Domestic Product, Gross Value Added, Gross National Income, Net National Income, Consumer Price Index  and Foreign Exchange Rate  using annual data over the period from 2004-05 to 2018-19. The study conducted ordinary least square and Panel least square analysis with the effects specification of the cross-section fixed to determine the relationship between the foreign direct investment and economic growth in India. Comparing to ordinary least square analysis the panel least square analysis shows the best model fit for the study. GDP had a strong and positive relationship with FDI in both the model comparing to other independent variables. The study concluded that the selected six independent variables (India's economic growth indicators) are had a significant relationship with the FDI in India.