Does Foreign Direct Investment Influence Economic Growth In Rapidly Growing Economies? An Examination of China and India (2012)

The purpose of the dissertation project is to empirically determine if Foreign Direct Investment (FDI) influences economic growth in rapidly growing economies? With emphasis placed upon China and India – both economies have seen exponential economic growth over the past decade. Both China and India have seen an abnormally high inflow of capital in several forms during the past few decades. Why such an inflow and what had inculcated the investors to adopt such a project in these countries?

This dissertation focuses in brief, the reason for such a massive undertaking by the multinationals. The dissertation undertaken also investigates the significant role of FDI among the other determinants of economic growth in these countries. For the purpose data’s for the last 39 years are taken into consideration. Methodology used consists of graphical representation and regression analysis. Graphical analysis is used to show the relationship between FDI and economic growth in INDIA and China.

From the graph it is clear that there is a positive relationship between FDI and GDP in China and they move in the same direction, while it is opposite in the case of India. To prove this a linear regression method is used with the help of SPSS. The results so obtained suggest that FDI has a positive impact on China and a less, but a positive impact on India’s economic growth. The dissertation will also:

  • Evaluate the contribution of FDI in economic growth
  • Find the nature of contribution made by these investment
  • Evaluate the rate of inflow of these investment in India and China
  • Study the significance of FDI with other economic growth indicators

  • 14,000 words – 46 pages in length
  • Excellent use of literature
  • Good in depth analysis
  • Excellent use of economic models
  • Ideal for business and economics students

1: Introduction
Motivation and Purpose of the Study
Brief Outline of the Study

2: Review of Literature
Existing Literature
Definition of FDI
General Theories and Concepts of FDI
Ownership Specific Advantage or OSA
Location Specific Advantage
Internalisation Specific Advantage
Types of FDI
Horizontal Foreign Direct Investments
Vertical Foreign Direct Investment
Forward vertical FDI
Backward FDI
Greenfield Investment
Mergers and Acquisition
Determinants of FDI
Economic Factors
Government policies
Privatization and Macro economic policies
Policies supporting private sector
Industrial and Trade Strategies
Strategy of MNE’s
Country Risks
Impact of FDI in Host Country Development
Impacts of Foreign Direct Investment
Technological Transfer
Impact on Human Capital and Labour Market
Effects on Capital Market

3: Foreign Direct Investment in China and India
FDI Inflows in China
The impact of FDI in Chinese Economy

4: Analysis
Methodology and Data Collection
Graphical Analyses
Regression Analysis
Regression Analysis of China
Regression Analysis of India

5: Findings and Conclusion



Growing Economies China and India Dissertation
Growing Economies China and India Dissertation

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