Impact of motives of inward FDI on benefits perceived by foreign multinational enterprises investing in India

Abstract

The study aims to determine the principal motives of inward foreign direct investment by foreign multinational companies in India. The study undertakes to find out the impact of motives of inward foreign investment of multinational firms on benefits as perceived by the managers.  The paper uses a survey approach to collect data about motives and its impact on benefits. Statistical tools, namely confirmatory factor analysis, structural equation modeling have been used. The study found that principal motive for foreign multinational firms to undertake investment is market-seeking followed by resource-seeking and efficiency-seeking motive. The strategic-asset seeking motive does not significantly influence foreign direct investment in India. The study found a positive impact between perceived benefits and motives of inward foreign direct investment in India.