Keywords
Export
FDI
cointegration and causality
How to Cite
Abstract
The present study analyses the relationship between Gross Domestic Product (LNGDP) per capita, exports, and Foreign Direct Investment (LNFDI) of India after the liberalization period from 1991 to 2022. Analysis is done on short- and long-term relation. The cointegration test Johansen employed for this study of long run equilibrium relationship among India’s economic growth/LNGDP per capita, LNEXPORTS of goods and services, and LNFDI. The test shows economic growth/LNGDP, LNEXPORT, and LNFDI are displaying long-run relationships and all moving in tandem throughout time. Changes in LNGDP per capita have a major short-term impact on LNFDI growth. Exports and foreign direct investment do not Granger-cause short-term fluctuations in LNGDP per capita. Additionally, LNFDI and LNGDP per capita have unidirectional Granger causality.
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