RESEARCH METHODOLOGY
In order to meet the objectives of the study to analyses the Impact of Foreign Direct Investment on Indian Economy, annual data have been collected from 2007-2016. However to make analysis between financial performance of FDI based Companies and Non FDI based Companies listed at BSE for 10 years has been considered. This study is based on secondary data. The required data have been collected from CMIE Prowess IQ data base.The tools used in the study are panel data Fixed Effect Model, Random Effect Model, Hausman test and Chow test. The sample size is selected on the basis of FDI definition given by IMF i.e. if foreign shareholding is 10% or more than 10% in the company that company will be considered as FDI based
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Profitability = f (Firm Quality Variables, Financial Variables) ----------------------------------------------------(1)
FDI Based Companies
ROAFDI= α+ β1 Age + β2Size + β3CR + β4QR + β5DTER + β6GSales + β7GPAT + β8GAssets + e ---------------------------------------------------------------------------------------------------------------------------------------------(2)
Non FDI Based Companies
ROANONFDI= α+ β1 Age + β2Size + β3CR + β4QR + β5DTER + β6GSales + β7GPAT + β8GAssets + e --------------------------------------------------------------------------------------------------------------------------------------------(3)
ANALYSIS AND INTERPRETATION
Food and Agriculture Sector
In the study Hausman test is done to know among fixed effect and random effect model which model is more suitable for 23 FDI based companies and 20 Non FDI Companies in Food & Agriculture sector, the results shows that for FDI based companies Random effect model is suitable (H =16.97, P=0.07) where as for Non FDI Companies fixed effect model is suitable (H=13.18 P=0.21). To know is there is any difference in the financial performance of FDI based companies and Non FDI Companies model is estimated separately. In table 2 the result of FDI based companies and Non FDI Companies in Food & Agriculture Sector from 2007 to 2016. Then Chow test is done to examine whether the coefficients obtained from the two samples are statistically different. The Chow test found to be F=0.21, thus F>F0.01
2) Calculate following values recursively. ae + bg, af + bh, ce + dg and cf + dh.
In the analysis of the sector structure, the advantage of German FDI stock data over transaction data is that secondary FDI is included in the statistics. In the case of dependent intermediary holding companies with participating interests subject to the reporting requirements, the investor’s actual interest on which a direct investment is based can therefore be made visible in many cases.
Equation: 6 H3O(aq) + 3 CH3CH2OH(aq) + 2 H2CrO4(aq) → 3 CH3CHO(aq) + 2Cr2+(aq) + 14 H2O(l)
Statistical and empirical analysis is something that is very valuable despite the application and system in question. This is true when the variables and facts are fairly straightforward and simple and it also holds true when the systems involved are very complex and large in nature. The latter is clearly the case when it comes to the impact and result of direct foreign investment in a given country. Such will be the point of empirical analysis for this report and the country that shall be used for the
Ajami and BarNiv (1984) attempted to explain the variability of FDI across countries. They emphasized in following determinants of FDI in US: relative size of the US market, change in exports to the US, growth of GNP in the home and host countries, decline in value of the US dollar during the late 1970s, inflation rates in the home and host countries, attractiveness of the US capital markets and research and development and manufacturing as a percent of GNP.
According to Eryigit (2012), “Foreign direct investment (FDI) is defined as establishing a new company or branch of a foreign company by foreign investor or share acquisitions of a company established in host country (any percentage of shares acquired outside the stock exchange or 10 percent or more of the shares or voting power of a company acquired through the stock exchange”. According to Fadli, Norazidah, Rhaudhah, Nurul, Salwani and Kamaruzaman (2011), stated that Malaysia one of the developing country that being openness to foreign country in order to attract foreign investor to maintain an accelerate growth to this country. They also stated that foreign direct investment plays an important role in capital formulation and economy growth
Fare = β0 + β1 * year + β2 * dist + β3 * passen + β4 * bmktshr + β5 * y98 + ui
Kobrin and Le (2005) and Ata ul lah (2006) such advantages accept encouraged the developing countries, including Pakistan, to allure FDI inflows. Inorder to actuate the actuality of such merits, several studies accept been conduct to analysis the appulse of FDI on bread-and-butter growth. However, theories and empiric abstract appear to action alloyed adumbration apropos the appulse of FDI on bread-and-butter advance in developing countries.
Sn = 6n2 - 6n + 1S3 = 6(3)2 – 6(3) + 1S3 = 6(9) – 18 + 1S3 = 54 – 17S3 = 37
In contemporary social and with the world econo006Dy expand. It has produced a great number of multinational banks, those banks in order to achieve more profit, they expand and develop to emerging countries, which is called foreign direct investment (FDI). So, in this report, in order to much better understand some information about FDI, especially FDI impact of foreign retail banking investment in China on the commercial performance Chinese retail banks. Besides, by using Chinese bank industry as a example. In this research, these can be broken down into four broad categories: one is reasons
The FDI creates capacity in the form of physical and logical infrastructure. The FPI, which is for short span of time, creates liquidity in the market and it is being invested in domestic financial markets such as capital market, money market, foreign exchange market etc. In this strong inclusive growth environment, the Indian economy is experiencing a robust development during 2006-07. The real Indian GDP growth has gone up to 9.3 percent in the first quarter of 2007-2008 from the level of 9.0 percent in 2005-06, advanced by double-digit growth in both the service and industrial sectors (Malayendu Saha 2009). The increasing trend in Indian economy has made India among one of the fastest growing states in the world.
The focus of this research is examining the affects of foreign direct investment on economic growth. Then the research reached this question: How Does Foreign Direct Investment Effects On Host Country’s GDP (Economic Growth)? Firstly, research starting with discussing the potential of FDI to affect host country’s economic growth and argues that two important objectes for FDI affects on economic growth, inflows of physical capital and technology spillovers, and according to research the technology spillovers have the stronger effect to enhance economic growth in the host country. Using cross section analysis with the range of ten years the empirical part of the paper reached a conclusion that FDI inflows improve economic growth
Abstract: This study examines empirically the relationship between FDI and economic growth using heterogeneous panel for the period 1983-2008. The empirical findings of Larsson panel co-integration show that FDI and economic growth are cointegrated. FMOLS results reveal that FDI and economic growth are positively related to each other. The results of panel homogeneous causality hypothesis show the existence of bi-directional causality between FDI and economic growth while the results of panel homogeneous non-causality hypothesis confirm the existence of unidirectional causality running from FDI to economic growth in selected panel. The results of heterogeneous causality hypothesis show the existence of bi-directional causality between FDI and economic growth only in case of Malaysia. The existence of uni-directional causality running from FDI to economic growth is observed in cases of Nepal, Singapore, Japan and Thailand
Even though India has been one of the top destinations for shared services, the country is rapidly emerging as a manufacturing location for many foreign corporations. Among the sectors, the highest number of FDI projects in the country was drawn by technology, followed by retail and consumer products. Multinational companies in India have produced higher returns across sectors such as FMCG, and pharmaceutical over the last three years in comparison to their Indian peers. The Indian units of global consumer goods like Hindustan Unilever, Nestle and Colgate-Palmolive have displayed returns of over 95%, 110% and 150%, respectively, on an average during the last three years, double the 35-42% returns stated by Indian companies like Dabur and Godrej Consumer.
Foreign Direct Investment is the investment of a country domestic assets into foreign structures, equipment and organizations, but does not include investment into stock markets. Foreign direct investment reflects the objective of obtaining a lasting interest by a resident entity in one economy (direct investor) in an entity resident in an economy other than that of the investor (direct investment enterprise). The lasting interest implies the existence of a long-term relationship between the direct investor and the enterprise and a significant degree of influence on the management of the enterprise. Direct investment involves both the initial transaction between the two entities and all subsequent capital transactions between them and among affiliated enterprises, both incorporated and unincorporated.