IMPLICATIONS OF FOREIGN DIRECT INVESTMENT ON GDP AND INDIAN RETAIL BUSINESS: OPPORTUNITIES FOR DOMESTIC ENTREPRENEURIAL VENTURES
Abstract
Foreign Direct Investment (FDI) is an investment in the form of investing and controlling ownership in a business in one country by an entity based in another country. It is thus distinguished from foreign portfolio investment by a notion of direct control. The spectacular and unprecedented growth of FDI in the global economic landscape over the last two decades has made it an integral part of the development strategy of both the developed and developing nation. It acts as a major catalyst in the development of a country through up-gradation of technology, managerial skills and capabilities in various sectors. The growing Indian market has attracted a number of foreign retailers and domestic corporate to invest in this sector. FDI in the retail sector can expand markets by reducing transaction and transformation costs of business through adoption of advanced supply chain and benefit consumers and suppliers (farmers). This paper therefore aims at identifying the impact of FDI on various stakeholders of the retail industry, the impact of FDI on GDP of the country over the last fifteen years (2001–2016) using Johansen’s Co-integration and Granger’s Causality Test, opportunities for growth of organized retail in India and analyze industry attractiveness by using Porter’s Five Forces Model.
Keywords:
Foreign Direct Investment, Stakeholders, GDP, Johansen’s Co – integration Test, Granger’s Causality Test, Porte’s Five Forces ModelDownloads
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