A vector autoregressive (VAR)‎ model analysis in the determinants of foreign direct investment (FDI)‎ inflows into India: pull factors effects

Abstract EN

The objective of this paper is to confirm the "pull factor" to determine the variables that explain the location of foreign investors in the case of India, through an estimation using the VAR model.

The result shows that Market size, and Trade Openness are key determinants of foreign direct investment in India.

Thus, infrastructure does not cause FDI in the long term.

This paper is structured around two initial parts.

In the first part, we propose a literature review of the determinants of FDI as the starting point of our analysis.

In the second part, we will present our empirical study to demonstrate the link between infrastructure and the attractiveness of foreign investors.