ipl-logo

Fdi And Economic Growth Essay

1985 Words8 Pages

CRISIL: YOUNG THOUGHT LEADER

Does FDI promote sustainable economic growth?

by

Prathyush Sarasa
Indian Institute of Management, Ahmedabad
Executive Summary

Literature review shows an ambiguous relationship between Foreign Direct Investment (FDI) and growth. A quick causality test for countries around the world in the past 13 years, however, points to a negative relationship between FDI and GDP growth. Both the literature and the empirical findings indicate the need for a deeper look into the benefits and downsides of foreign direct investment. After analyzing the positives and negatives of FDI, a framework comprising a set of indicators is prescribed to evaluate FDIs. These indicators can be broadly classified as economic, productivity, social, and environmental factors.
These indicators are then identified in the joint venture of Maruti Suzuki India Ltd. Given the success of the investments undertaken by the enterprise, the presence of a few prescribed factors justifies their inclusion in the framework. Table of Contents

Particulars Page No.
Introduction 1
Causality: Does FDI affect growth? 1
Effects of FDI 2
Indicators for Sustainability 3
Case Study: …show more content…

Maruti Suzuki India Limited is a leader in the automobile industry of the country today. Along with this, the company is renowned for its small-car expertise, product portfolio, product quality, service network, brand strength and skilled labor. The company has arguably added immense value in terms of output and has contributed significantly to the development efforts of the Indian economy. Suzuki (the foreign investor) not only invested in its venture partner, but also invested substantially in multiple business functions of suppliers, dealers, and service providers. Alongside, it also brought in Japanese technology and management skills to the Indian

Show More
Related

  • International Trade Dbq Essay

    1640 Words  | 7 Pages

    In the 1500’s the world was run on an Independent world, which meant that all countries were depending on their selves. Throughout the early to late 1500’s countries were trading with each other for goods either with money or other goods that other countries were unable to produce themselves. There were trade circles all over the world that trade runners would travel to unload their cargo and stock up products they receive from trade. These countries were trading materials such as gold, sugar, tobacco, and metals, and other raw materials that were valuable. By the 1700 the world was turning more interdependent.

    Read More

  • Causal Togs: A Case Analysis Of The Casual Tog Company

    1746 Words  | 7 Pages

    Economic analysis and company performance forecasting are necessary for making investment management (Hiriyappa,2008). There is lack of investment management which has exerted burden over the company to keep getting revenue for current as well as new production plants. If the new plants were set up after examination of organization’s structure and forecast of sales and revenue, then the situation would have been easier. The company mainly depends upon reports by managers who are not communicating well with each other as they are not co-operative. There is an information overload which as barrier to effectively communicate within the organization (Robbins, 2011).

    Read More

  • International Trade Dbq Essay

    465 Words  | 2 Pages

    Trade has been a driving force in global history, shaping societies and economies across the world. It helped bring in many resources to other countries through cultural diffusion and opened new opportunities for citizens. Nevertheless, trading has also caused overproduction in certain areas and limited resources available. Trade has been shown in global history through Middle Eastern trade routes (Document 1), Timbuktu during the height of the Mali Empire (Document 2), and Caravans from the northern coast (Document 2). Trade had a significant impact on culture and society.

    Read More

  • Global Trade Dbq Essay

    841 Words  | 4 Pages

    Benjamin Franklin said, “No nation was ever ruined by trade.” During the early modern era, technological advancements in shipbuilding and increased knowledge on wind and current patterns made global trading possible. The increased flow of trade in the 1300s through 1800s created important social relations and economic opportunities due to the increased integration of foreign people and desire to be wealthiest and most powerful, while improving government, culture, and ideas in the modern world. Global trading increased the spread of people, which also increased the spread of religion and culture.

    Read More

  • Jaguar Land Rover Swot Analysis

    741 Words  | 3 Pages

    3. Jaguar Land Rover SWOT Analysis a. Strength In global market, Jaguar Land Rover has been the most successful brand worldwide. The most common strength of Jaguar Land Rover is that they are the leading brand known for their luxurious design from exterior to interior.

    Read More

  • The Impact Of Globalization In China

    1404 Words  | 6 Pages

    First and foremost, one must acknowledge the plainly visible fact that the Chinese economy has grown exponentially since the process of integration into the global economic system began. China 's comparative advantages, particularly in the labor sector, has transformed it into the second largest recipient of FDI in the world.1 Over the course of the last 20 years, exports have grown approximately 17.1 percent per year.2 This ultimate result of this investment and trade has been an overall growth rate 8 percent per annum,3 which would have been completely unattainable without the country 's engagement in globalization. Foreign investments have

    Read More

  • Foreign Investment In Russia Essay

    2010 Words  | 9 Pages

    Introduction One of the major problems of reconstruction and modernization of the Russian economy - is attracting foreign investment. Given the serious technological backwardness of the Russian economy for most items, Russia needs foreign capital, which could bring new (for Russia) technology and modern management methods, and promote the development of domestic investment. The experience of many developing countries shows that the investment boom in the economy begins with the arrival of foreign capital. Creating your own advanced technologies in several countries began with the development of technology brought by foreign capital.

    Read More

  • Case Study Of Mahindra

    3102 Words  | 13 Pages

    EXECUTIVE SUMMARY Mahindra and Mahindra, the business sector pioneer in multi-utility vehicles in Asian nation. The corporate began creating business vehicles in 1945. Mahindra is that the pioneer by a long shot in business vehicle furthermore the second biggest inside of the voyager vehicle market. The corporate is that the world 's 6th biggest medium and huge business vehicle creating. Mahindra is best celebrated for utility vehicles and tractors in Asian nation, Its car division, the organization 's most established unit (established in 1945), makes jeeps and three-wheelers (not explorer "auto rickshaws," however utilitarian conveyance and flatbed incarnations).

    Read More

  • Disadvantages Of Human Resource Practices At Tesco

    935 Words  | 4 Pages

    These factors are also used as a tool to determine the company’s current state before carrying out any implementations or making new decisions. These factors

    Read More

  • Why Do Companies Invest International

    1599 Words  | 7 Pages

    Introduction When people think about globalization, they often first think of the increasing volume of trade in goods and services. Trade flows are indeed one of the most visible aspects of globalization. But many analysts argue that international investment is a much more powerful force in propelling the world toward closer economic integration. Investment, often alters entire methods of production through transfers of know-how, technology and management techniques, and thereby initiates much more significant change than the simple trading of goods. Over the past ten years, foreign investment has grown at a significantly more rapid pace than either international trade or world economic production generally.

    Read More

  • P-Political Factors Affecting Toyota Motor In India

    1469 Words  | 6 Pages

    P-Political factor: - In the political factor, this alludes to government approach for example, the utilization of renewable vitality. Political choices can affect on numerous indispensable ranges, for example, the earth of the workforce, the people 's wellbeing and the quality of innovation, for example, crossover framework. There are few points under the political factor that affects the Toyota motors in the Indian market like… Government support and attachment in businesses of Toyota Motor in India. There has additionally been a proposal for expense unwinding on venture of more than Rs. 500 Crore.

    Read More

  • Essay On Economic Globalization

    1119 Words  | 5 Pages

    Economic globalization refers to the free movement of goods, capital, services, technology and information around the world. Since the 1990s, due to the improvement of advanced communication technologies and the rapid expansion of multinational corporations, economic globalization has become an important trend of the world economic development. This trend not only provides a broader space for international markets for all countries, but also aggravates the competition among countries for market and resources. Economic globalization is an inevitable result of the development that no country can evade. In this paper, we will discuss that economic globalization is beneficial or not to developing countries.

    Read More

  • Kfc Marketing Environment Analysis

    1772 Words  | 8 Pages

    There are six major macro environmental factors of a company which are demographic environment, economic environment,

    Read More

  • Essay On Economic Growth And Economic Development

    1597 Words  | 7 Pages

    Economic growth and economic development In measuring and identifying the factors that stimulate the growth of the economy of a nation such as the Republic of India, a distinction needs to be made between economic growth and economic development. For a nation to experience economic growth, there must be an increase in the gross domestic product (GDP), which is a qualitative measure of the value of all finished goods and services produced in that country within a period of time. However, economic development which is usually measured through the human development index (HDI), includes not only an increase in the output of goods and services, but an improvement in the welfare of individuals within a country.

    Read More

  • Maruti Suzuki Case Study

    2531 Words  | 11 Pages

    Brief History of Company Maruti Suzuki India Limited is one of the leading 4-wheeler automobile manufacturing company in India. It is a subsidy of Japanese manufacturer Suzuki. The company was founded in the year 1981, and the first manufacturing plant was set up in Gurgaon, Haryana. The company was previously known as Maruti Udyog Limited. It entered into a Joint Venture Agreement with Japanese Automobile giant Suzuki.

    Read More

More about Fdi And Economic Growth Essay

Open Document