Pradhan, Jaya Prakash (2003): Rise of service sector outward foreign direct investment from Indian economy: trends, patterns, and determinants. Published in: GITAM Journal of Management , Vol. 4, No. 1 (2006): pp. 70-97.
Download (358kB) | Preview
The rise of service sector outward FDI (OFDI) activities has emerged as one of the most important aspects of Indian economy during nineties. The present paper reviews the recent trends and patterns and tries to identify determinants of such investment. As compared to the eighties, the character of service sector OFDI flows has gone through several transformations. In the seventies it is largely a phenomenon led by firms from hotels & restaurants, finance and marketing segments and is being directed at developing regions in overwhelming cases and is mostly minority owned. In contrast, during nineties it is predominantly led by the software segment of the service sector, locationally developed country oriented and is largely majority-owned ventures. The rising trends in the service sector Investment Development Path (IDP) of Indian economy has been found to be related to the stylized aspect of economic growth expressed in terms of structural shift in economic activities. At the firm level the OFDI behavior of service sector firms is observed to be non-linearly related to the firm age and size, both relationships following inverted U-shape curves. Firm’s innovation, export orientation and profitability are also found to be important explanators in the rise of OFDI at the firm level. The import of capital goods however appears to have a negative impact on trans-border expansion of service sector firms.
|Item Type:||MPRA Paper|
|Original Title:||Rise of service sector outward foreign direct investment from Indian economy: trends, patterns, and determinants|
|English Title:||Rise of service sector outward foreign direct investment from Indian economy: trends, patterns, and determinants|
|Keywords:||Service Sector; Outward FDI|
|Subjects:||F - International Economics > F2 - International Factor Movements and International Business > F23 - Multinational Firms ; International Business
L - Industrial Organization > L8 - Industry Studies: Services
F - International Economics > F2 - International Factor Movements and International Business > F21 - International Investment ; Long-Term Capital Movements
|Depositing User:||Dr. Jaya Prakash Pradhan|
|Date Deposited:||06. Sep 2009 18:52|
|Last Modified:||11. Feb 2013 19:21|
Business Line (2000) ‘Aptech buys US firm for $10 m’ Tuesday, August 01, 2000.
Business Line (2000) ‘Aptech to expand global reach’ Monday, October 02, 2000.
Business Line (2001) ‘Aptech to expand China presence’ Saturday, July 28, 2001.
Business Line (2001) ‘Aptech to take majority stake in US firm’ Wednesday, January 24, 2001.
Business Line (2001) ‘EIH plans Rs 1,000-cr investment in 3 years’, Wednesday, August 22, 2001.
Business Line (2002) ‘NIIT acquires Click2learn assets’ Friday, Jan 25, 2002.
Business Line (2002) ‘NIIT acquires German firm’ Friday, Nov 15, 2002.
Business Line (2002) ‘NIIT acquires US company’ Thursday, Sep 05, 2002.
Dunning, J.H. and R. Narula (1996) ‘The Investment Development Path Revisited: Some Emerging Issues’, in Dunning and Narula (etd.) Foreign Direct Investment and Goverments, Routledge, London and New York, pp 1-41.
IAMR (1999) Manpower Profile- India Year Book, New Delhi.
Kumar, Nagesh and Jaya Prakash Pradhan (2003) ‘Determinants of Outward Foreign Direct Investment From A Developing Country: The Case of Indian Manufacturing Firms’, RIS-DP #44/2003, New Delhi.
UNCTAD (1997) Sharing Asia’s Dynamism: Asian Direct Investment in the European Union, Sales No. E.97.II.D.1.
UNCTAD (1999) Analysis of experiences in selected services sectors, TD/B/COM.1/28, 17 August 1999.
World Bank (2002) World Development Indicators, 2002 CDROM.