Purpose

This paper aims to examine the dynamics between trade openness, foreign direct investment (FDI) and economic growth in India over the period 1979 to 2017. This study further considers the role of pre and post-economic reforms in the analysis of these dynamics.

Design/methodology/approach

The authors apply the autoregressive distributed lag model to investigate the possible long-run associations among the variables. Zivot-Andrew unit root test was applied to detect the structural breaks present in the data series. Toda-Yamamoto causality approach has been applied to examine the direction of causality among the variables.

Findings

Findings show that trade openness exerts a negative impact on economic growth in the long-run. Although FDI inflow promotes economic growth in the long-run, FDI inflow does not seem to affect growth in the short-run. As far as causality analysis is concerned, findings confirm a unidirectional causality is flowing from FDI inflow and labour force to per capita gross domestic product growth in India.

Practical implications

The negative impact of trade openness on growth suggests that policymakers should implement more export-oriented policies to boost economic growth in the long-run. The ratio of exports to the total volume of trade has not increased satisfactorily over the years. Additionally, appropriate policies should aim at extracting the benefits of FDI inflow in the long-run.

Originality/value

Although several theoretical and empirical literature has investigated the nexus between FDI (or trade) and growth, this study, as a fresh attempt, investigates the long-run dynamics between trade openness, FDI, capital formation, labour force and economic growth in India.

中文翻译：

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贸易开放、外国直接投资和经济增长之间的动态：来自新兴经济体的证据

目的

本文旨在研究 1979 年至 2017 年期间印度贸易开放、外国直接投资 (FDI) 和经济增长之间的动态。本研究进一步考虑了经济改革前后在分析这些动态中的作用。

设计/方法/方法

作者应用自回归分布滞后模型来研究变量之间可能的长期关联。Zivot-Andrew 单位根检验用于检测数据系列中存在的结构断裂。Toda-Yamamoto 因果关系方法已被应用于检查变量之间因果关系的方向。

发现

研究结果表明，从长远来看，贸易开放对经济增长产生负面影响。尽管 FDI 流入在长期促进经济增长，但 FDI 流入似乎不会影响短期增长。就因果关系分析而言，研究结果证实了从 FDI 流入和劳动力到印度人均国内生产总值增长的单向因果关系。

实际影响

贸易开放对增长的负面影响表明，政策制定者应实施更多以出口为导向的政策，以促进长期经济增长。多年来，出口占贸易总额的比例并没有得到令人满意的增长。此外，适当的政策应旨在从长期的外国直接投资流入中获益。

原创性/价值

尽管一些理论和实证文献已经研究了 FDI（或贸易）与增长之间的关系，但本研究作为一项新尝试，调查了印度贸易开放、FDI、资本形成、劳动力和经济增长之间的长期动态。