TITLE:
Have the Special Economic Zones Succeeded in Attracting FDI?—Analysis for India
AUTHORS:
Tamali Chakraborty, Haripriya Gundimeda, Vinish Kathuria
KEYWORDS:
Special Economic Zones, Special Economic Zone Policy, Foreign Direct Investment, Panel Data Model, India
JOURNAL NAME:
Theoretical Economics Letters,
Vol.7 No.3,
April
27,
2017
ABSTRACT: The introduction of
Special Economic Zones (SEZs) in India has injected hope for augmented economic
growth in recent future. The motive behind establishment of SEZs was mainly to
fuel rapid economic growth, provide world class infrastructure and employment,
promote exports, increase foreign exchange reserves and attract more Foreign
Direct Investment (FDI). The main objective of the paper is to investigate
whether the enactment of SEZ policies had any impact on inflow of FDI among
Indian states. This is tested using panel data techniques on 16 groups of
states over 14 years period from 2001 to 2014. The results indicate that
enactment of SEZ policy (as well as operational SEZs) in a state has induced
more FDI inflow. Based on the results, it can be concluded that the states,
which want to benefit from FDI inflow, they need to enact the policies sooner.