International Research journal of Management Science and Technology

  ISSN 2250 - 1959 (online) ISSN 2348 - 9367 (Print) New DOI : 10.32804/IRJMST

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“ECONOMIC GROWTH OF FDI IN DEVELOPING COUNTRIES IN THE CONTEXT OF POLITICAL STABILITY”

    1 Author(s):  KANIKA AGARWAL

Vol -  4, Issue- 2 ,         Page(s) : 341 - 347  (2013 ) DOI : https://doi.org/10.32804/IRJMST

Abstract

The paper suggests that the flow of FDI in developing countries is likely to be affected by high debt, high inflation, and constraints on the executive variables. The impact of FDI on growth is direct i.e. not conditional on other country characteristics, boost economic growth by investing in human capital development, as FDI does not induce growth directly in India. FDI and growth are endogenously related, and the effect is bidirectional: from FDI to growth and from growth to FDI. Political instability affects growth, but the effect depends on the dimensions of political instability and appears to vary for different regions: instability of the regime and protest affect growth, while violence doesn’t appear to affect either growth or FDI, and the higher incidence of political instability in India affects growth differently in India relative to developing countries.

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