FOREIGN DIRECT INVESTMENT, ECONOMIC GROWTH AND TRADE OPENNESS IN INDIA: A TIME SERIES ANALYSIS

The present study investigated the causal relation among foreign direct investment, economic growth and trade openness in India for the period 1970–2019. Johansen Cointegration test indicates the presence of long-run association among the variables. The results of vector error correction model indicated the presence of long-run causality runs from FDI to GDP and trade openness. Moreover, the empirical evidence revealed short-run unidirectional causality from economic growth to FDI and the bidirectional causality among trade openness and FDI in the short-run. The findings were constant, as Indian economy has been undergoing a steady economic growth during the few decades and the volume of FDI also surged to substantial extent with minor leaps and bounds. has increased to a significant extent with minor leaps and bounds.