Behavioural Pattern of FDI Inflows: Autoregressive Study

  •  Rahul Singh    
  •  H. Chaturvedi    
  •  Faraji Kasidi    


The study investigates on the behavioral pattern of sectoral foreign direct investment (FDI) inflows in Indian economy for the period 2002-2010. Thirteen sectors of the economy as categorized by the Government of India are used for the study. Econometrics tools of analysis are applied. In particular the study uses Autoregression of Order One denoted as AR (1). The study seeks to explain behavioral pattern of FDI inflows. The study uncovered that Telecommunications and Construction sectors exhibited explosive behavior. Housing and Real Estate and Automobile sectors exhibited non-stationary behavioral pattern during the period. However, some sectors viz electrical equipment including Computer Software and Electronics; Transportation Industry; Chemicals (other than fertilizers); Drugs and Pharmaceuticals; Food processing industries; Cement and Gypsum products and Metallurgical industries have exhibited stationarity. Also the study exposes foreign investors’ biases in choosing some sectors in relation to other sectors.

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