International Journal of Statistics and Reliability Engineering

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Vol 11, No 1:

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Implications of Outward Foreign Direct Investment on Sustainability Parameters

Abstract

The impetus behind this empiric scrutiny emerges due to existence of the paradoxical literature on outward FDI growth inferences and the requisite to align outward FDI with sustainability parameters in order to deliver sustenance to India’s growth objectives or SDG goals. The study contemplates the fact that an economy can proliferate its economic gains from vertical and horizontal FDI outflows by crafting FDI outflows such that its complementary with exports and gross domestic investment which eventually enhance employment in India. Driven by this stimulus, the present study endeavors to probe into the impact of outward FDI on exports and employment, considering them major sustainability parameters. Along with this the study attempts forecast the direction forthcoming outward FDI. The study uses various econometric techniques, such as ARIMA models, Johansen cointegration test, Vector error correction model, Granger causality test, ARDL method and residual tests to arrive at vigorous results. Through ARIMA models the study forecasts that India might observe a downfall in FDI outflows in coming years. The study documents interesting facts that there exists cointegrating relationship between FDI outflows and exports, and FDI outflows and employment. Exports cause FDI outflows in India. Interestingly, the study settles that FDI outflows do not have a negative impact on employment. The study recommends policy makers to formulate policies which focus on FDI outflows that enhances exports and employment in India.

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ISSN(P) 2350-0174

ISSN(O) 2456-2378

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