Overseas Direct Investment - A Study Of Stakeholder Perception In India
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Abstract
This study examines Overseas Direct Investment (ODI) from India, focusing on stakeholder awareness, investment determinants, risk perception, and government support. Utilizing John Dunning’s Eclectic Paradigm and other internationalization theories, the research explores the impact of macroeconomic variables such as exchange rate, interest rates, GDP, and trade on ODI from India. A structured survey of 400 respondents, including bankers, corporate professionals, and academicians, reveals that ODI awareness is high, with equity investment being the preferred mode. The United States and Europe emerge as the most favored destinations, while agriculture, mining, and IT-enabled services lead sectoral preferences. The findings indicate that international trade relationships significantly drive ODI decisions, surpassing macroeconomic factors like exchange rates and GDP. However, a perception of high risk and insufficient government support persists among stakeholders. Statistical analysis, including reliability tests and regression models, highlight the moderate explanatory power of macroeconomic variables, suggesting the need for further investigation into firm-level and geopolitical factors. The study emphasizes policy recommendations such as streamlining regulatory frameworks, enhancing government support, and fostering a conducive environment for Indian firms to expand globally. Future research can explore sector-specific ODI trends and qualitative determinants influencing investment decisions.
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References
https://rbidocs.rbi.org.in/rdocs/content/pdfs/GazetteRules23082022.pdf
Data source - Reserve Bank of India - Data on Overseas Investment
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