Nexus between formal institutions and inward FDI in India: a nonlinear autoregressive distributive lag approach

IF 1.9 Q2 ECONOMICS

INTERNATIONAL JOURNAL OF SOCIAL ECONOMICS Pub Date : 2024-01-25 DOI:10.1108/ijse-05-2023-0375

Richa Patel, Dipti Ranjan Mohapatra, Sunil Kumar Yadav

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引用次数: 0

Abstract

Purpose

This study presents time-series data estimations on the association between the indicators of institutional environment and inward foreign direct investment (FDI) in India utilizing a comprehensive data set from 1996 to 2021.

Design/methodology/approach

The study employs the nonlinear autoregressive distributive lag (NARDL) model. The asymmetric ARDL framework evaluates the existence of cointegration among the factors under study and highlights the underlying nonlinear effects that may exist in the long and short run.

Findings

The significance of coefficients of negative shock to “control of corruption” and positive shock to “rule of law” is greater when compared to “government effectiveness, regulatory quality, political stability/absence of violence.” The empirical outcomes suggest the positive influence of rule of law, political stability and government effectiveness on FDI inflows. A high “regulatory quality” is observed to deter foreign investment. The “voice and accountability” index and negative shocks to the “rule of law” are exhibited to have no substantial impact on the amount of FDI that the country receives.

Originality/value

This study empirically examines the institutional determinants of FDI in India for a comprehensive period of 1996–2021. The study's findings imply that quality of the institutional environment has a significant bearing on India's inward FDI.

Peer review

The peer review history for this article is available at: https://publons.com/publon/10.1108/IJSE-05-2023-0375

查看原文本刊更多论文

印度正规机构与外来直接投资之间的联系：非线性自回归分布滞后法

目的本研究利用 1996 年至 2021 年的综合数据集，对印度制度环境指标与外来直接投资（FDI）之间的关系进行了时间序列数据估算。非对称 ARDL 框架评估了所研究因素之间是否存在协整关系，并强调了可能存在于长期和短期的潜在非线性效应。研究结果与 "政府效率、监管质量、政治稳定/无暴力 "相比，"腐败控制 "的负向冲击系数和 "法治 "的正向冲击系数更为显著。实证结果表明，法治、政治稳定和政府效能对外国直接投资流入具有积极影响。据观察，"监管质量 "高会阻碍外国投资。而 "发言权和问责制 "指数以及 "法治 "受到的负面冲击则显示对该国获得的外国直接投资额没有实质性影响。原创性/价值本研究以实证方法研究了 1996-2021 年印度外国直接投资的制度决定因素。研究结果表明，制度环境的质量对印度的外来直接投资具有重要影响。同行评议本文的同行评议历史见：https://publons.com/publon/10.1108/IJSE-05-2023-0375。

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来源期刊

INTERNATIONAL JOURNAL OF SOCIAL ECONOMICS ECONOMICS-

CiteScore

3.20

自引率

5.30%

发文量

期刊介绍： The International Journal of Social Economics publishes original and peer-reviewed theoretical and empirical research in the field of social economics. Its focus is on the examination and analysis of the interaction between economic activity, individuals and communities. Social economics focuses on the relationship between social action and economies, and examines how social and ethical norms influence the behaviour of economic agents. It is inescapably normative and focuses on needs, rather than wants or preferences, and considers the wellbeing of individuals in communities: it accepts the possibility of a common good rather than conceiving of communities as merely aggregates of individual preferences and the problems of economics as coordinating those preferences. Therefore, contributions are invited which analyse and discuss well-being, welfare, the nature of the good society, governance and social policy, social and economic justice, social and individual economic motivation, and the associated normative and ethical implications of these as they express themselves in, for example, issues concerning the environment, labour and work, education, the role of families and women, inequality and poverty, health and human development.