An Empirical Examination of the Determinants of Foreign Direct Investment in India

Developing countries around the world needs huge capital for financing their strategic goals. Capital in the form of foreign direct investment (FDI) is the most favored destination for such countries. This paper examines the macroeconomic variable that act as determinants of FDI inflow into India. The potential FDI determinant is comprehensive, and includes variables proposed from literatures. The authors makes use of time series data for the period 2000-01 to 2011-12, and the study employs ordinary Least Square (OLS) method. Order of integrity for all the variables is I (1). Results indicate that among the selected variables, export, index of industrial production, inflation shows statistically significant at 5 % level