Impact of Outward FDI on Firms’ Productivity in the Steel Industry: Evidence from India

Abstract

This paper examines the impact of Outward FDI (OFDI) on productivity and analyses its substantial effect on home countries' steel firms. For the analysis, the study classifies the steel companies into a treatment group and a control group. To analyse India's FDI investment objective and its impact on productivity, the study ranks economies into low- and middle-income, high- and middle-income, and tax havens to analyse productivity growth. The data for the analysis come from Prowess, a World Bank database. The data of outward FDI from Indian companies is compiled from the UNCTAD database. The study suggests that research on FDI does not focus on the impact on the issuing party, particularly FDI from low- and middle-income countries. The study analyses the effects of FDI with special reference to the Indian steel industry.