The role of foreign direct investment in India's exports in the post liberalization period

Abstract

<P>THIS DISSERTATION ANALYSES THE ROLE PLAYED BY INWARD FOREIGN DIRECT INVESTMENT (FDI) IN INDIAA??S EXPORT PERFORMANCE FROM MACROECONOMIC AND MICROECONOMIC PERSPECTIVES, DURING THE POST LIBERALIZATION PERIOD. THE MACROECONOMIC APPROACH INVOLVES UNDERTAKING ECONOMETRIC INVESTIGATION TO EXPLORE THE RELATIONSHIP BETWEEN FDI AND INDIAA??S MERCHANDISE AND SERVICE SECTOR EXPORTS USING AGGREGATED DATA. THE FINDINGS CONFIRM THE PRESENCE OF SHORT-RUN UNIDIRECTIONAL COMPLEMENTARY CAUSALITY RUNNING FROM FDI TO EXPORTS. </P><P>FROM A MICROECONOMIC PERSPECTIVE, REVEALED COMPARATIVE ADVANTAGE AND INTRA-INDUSTRY TRADE ESTIMATES ARE USED TO ANALYZE THE POTENTIAL OF EXPORT-ORIENTED FDI IN INDIAA??S MANUFACTURING SECTOR. THERE ARE INDICATIONS OF PRODUCTION FRAGMENTATION DUE TO FDI INFLOWS, PARTICULARLY IN AUTOMOBILES, ELECTRONICS AND ELECTRICAL MACHINERY.</P><P>A QUALITATIVE ANALYSIS OF THE OFFSHORING PHENOMENON IN INDIAA??S INFORMATION AND COMMUNICATION (ICT) SECTOR FIND THAT IT IS MOVING UP THE VALUE