Domestic capital vs. foreign capital new enterprise creation : the case of FDI in India

Tulasidharan Sajikumar, Amândio F.C. Da Silva

The attempt of this paper is to find an empirical relationship between Foreign Direct Investment and New Firms (Paid up Capital) and Gross Capital Formation (proxy for business growth) and Credit to Commercial Sector and Gross Capital Formation using the test of stationarity (ADF, PP, and KPSS methods), Johansen Cointegration and Granger's Causality. The results show that FDI crowds out creation of new firms and capital formation and it is the Credit flow to the commercial sector that causes Gross Capital Formation at current price. It shows domestic flow of credit is more influential in capital formation rather than foreign capital inflow.

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Year of publication:	2023
Authors:	Sajikumar, Tulasidharan ; Silva, Amândio F. C. da
Published in:	Financial internet quarterly. - Rzeszów : University of Information Technology and Management, ISSN 2719-3454, ZDB-ID 3121236-0. - Vol. 19.2023, 4, p. 9-24
Subject:	Foreign Direct Investment \| Gross Capital Formation \| Commercial Sector \| Savings-Investment Gap \| Paid-Up Capital \| Auslandsinvestition \| Foreign investment \| Indien \| India \| Investition \| Investment \| Sparen \| Savings \| Kapitalimport \| Capital imports \| Kapitalmobilität \| Capital mobility \| Unternehmensgründung \| Business start-up \| Kapitalismus \| Capitalism

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Type of publication:	Article
Type of publication (narrower categories):	Aufsatz in Zeitschrift ; Article in journal
Language:	English
Other identifiers:	10.2478/fiqf-2023-0024 [DOI]
Classification:	E22 - Capital; Investment (including Inventories); Capacity
Source:	ECONIS - Online Catalogue of the ZBW

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