Bachelor 's Thesis The determinants of Foreign Direct Investment Inflows: The case of India

Foreign direct investment (FDI) has been a vital role in the international financial capital flows since the end of World War II. By investigating the effect of the determinants on FDI inflows for 8 countries (India, China, Hong Kong, Japan, South Korea, Bangladesh, Singapore, Thailand) in the period from 1991 to 2008, this thesis explore which are the main determinants of attracting India’s FDI and in what extent do these factors effect on FDI inflows. Running two methodologies, namely Pooled OLS and Fixed effect for two regressions, first regression without Open variable, second one without GDP variables, the results are almost the same as those in previous researches. GDP and Open variable are the most significant determinant of FDI flows in 8 countries. According to the residuals analysis for India by 5 factors (GDP, Inflation, Employment, Infrastructure, Open), India has high residuals. And the results confirm that all 5 factors have strong effects to attract FDI inflows in India