TITLE:
Does Good Governance Matter FDI Inflow? Evidence from India
AUTHORS:
Hayat Khan, Itbar Khan, M. Shabir Jan, Arif Hussain Jandan, Sher Khan
KEYWORDS:
Governance Determinants, Foreign Direct Investment, Regression Analysis, Pearson Correlation
JOURNAL NAME:
Modern Economy,
Vol.10 No.6,
June
21,
2019
ABSTRACT: Is there a relationship between governance and
Foreign Direct Investment (FDI) adept in a presumed country? What is the
importance of institutional set-up or governance in stimulating growth in a
developing country? To answer this query, this study explores the distinction
of good governance for FDI inflows in India for the time period of 14 years, i.e. from 1996 to 2012 by employing
multiple regression models. Firstly, variance inflation factor (VIF) test shows that there is no perfect
multicollinearity. Secondly, the empirical results evinced that institutional
factors matter for huge FDI attraction in India. The paper evidence that
India attract more FDI due to good governance, therefore it is acclaimed that
government of India should take auxiliary steps to improve governance which can
tempt more foreign investors and can help attain full employment, boost growth
and can nurture per capita income.