The Evolving Framework of Determinants of Foreign Direct Investment: A Review of Literature
Journal Title: MANTHAN: Journal of Commerce and Management - Year 2017, Vol 4, Issue 2
Abstract
The last two decades have witnessed intense competition among countries, particularly developing economies, to attract foreign direct investment (FDI). This is because FDI fills the gap between desired investment and domestic private investment and helps them to acquire new technology and managerial skills. This paper attempts to understand the evolution of FDI theory along with changes in the significance of determinants of FDI over a period of time. An analysis of extant literature shows that factors such as market size and per capita incomes have remained important determinants of FDI decisions both traditionally as well as in contemporary times. However, some factors such as resources, trade openness and FDI openness have now become secondary factors influencing FDI. Other factors which were earlier secondary but have now gained prominence as FDI determinants are infrastructure; institutional factors such as corruption and political stability; and tax related variables. The above review provides insights into changing aspects of FDI decision-making and useful inputs to policy makers regarding the areas which need focus for creating a congenial climate for FDI.
Authors and Affiliations
Rahul Bhasin, K V Bhanu Murthy
Keywords
Related Articles
- EP ID EP625981
- DOI 10.17492/manthan.v4i02.11866
- Views 147
- Downloads 0
Modelling Volatility of BSE Realty Index using Conditional Heteroscedasticity Models
This study empirically examines the nature of volatility in BSE Realty Index using daily closing price of BSE Realty Index for five and half years period from January 2011 to June 2016. The study employed conditional het...
A Case Study of Ageing People: Real Life Scenario and Future Challenges
With people having longer lives, the share of older people in the total population is expanding rapidly, leading many retirees to face a challengeable life. Support from government and family are being reduced for the ol...
Implementation of the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) across the States of India: An Overview
The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), 2005 was introduced in India to create employment opportunities for the rural people. As per the provisions of the said Act, the State Government shal...
An Empirical Evaluation of Factors leading to Happiness
Happiness is a multidimensional concept with strong predisposition for qualitative dimensions-emotional well-being, good life, generosity, freedom from suffering, health, sustainability etc. Its measurement also requires...
Liquidity versus Profitability: A Study on Hindustan Unilever Limited
As per the general notion, liquidity should have an opposite relationship with profitability. In case of Hindustan Unilever Limited, it has been observed that with the passage of time, the company was able to improve bot...