VOLUME - 6, ISSUE – 2, JULY.TO DEC,2020 ISSN NO. : 2455-4642 (ONLINE)
IDEES –International Multidisciplinary Research Journal
(Peer Reviewed)
A Research Paper
on
Linkage of Foreign Direct Investment towards Economic Growth of India:
Empirical Study Using ARDL Approach of Cointegration
By
Dr. Tanvi Bhalala
Assistant Professor,
Prof. V.B. Shah Institute of Management, Amroli, Surat (Gujarat)
9913655856
Abstract
International capital movement plays a significant role for growth and development of
recipient countries by availing multiple benefits such as providing necessary capital,
resources and technology. International capital inflow makes the effect on economic situation
of the developing countries. An international investment in form of Foreign Direct
Investment (FDI), considered as more stable and prominent source of capital inflows. The
present study has been conducted to evaluate long-run and short-run impact of FDI on
economic growth of India. In order to consider economic growth, Gross Domestic Product
(GDP) has been considered. The empirical analysis has been conducted by Autoregressive
Distributed Lag Approach (ARDL) of Cointegration for the period of 1991-92 to 2016-17.
The result indicated presence of long-run relationship between FDI and economic growth of
India. This means that foreign investment helps to enhance economic growth into India.
Key words: FDI, GDP, ARDL, Indian Economy
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Introduction
The analysis of national growth of country is difficult as combination of factor to determine
the growth of economy to contributing towards the growth of Gross Domestic Product (GDP)
and associate risk in the nation. There are many determinants to explain the nation growth
including domestic and international. Among all, foreign direct investment (FDI) has become
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