Location Determinants of Indian OFDI: Insights from Panel Data Analysis

Abstract

The present study attempts to analyze the determinants affecting Indian Outward Foreign Direct Investment (OFDI) during the second generation of globalization. Results show that economic factors like trade openness and natural resource trade of the host country are highly significant variables for Indian OFDI. The case of non-economic factors such as political stability and non-violence remain significant variables for Indian investment, but the regulatory quality is not noteworthy. The study suggests that to expand the growth of OFDI, and the government can search for other suitable markets that are less capital-intensive or use underdeveloped technology. So, India has an alternative to improve its trade relations with African and Asian markets.