Localization of FDI flows: Evidence on Infrastructure as a Critical Determinant
Subramanian, K and Chakrabarti, R and Meka, S (2011) Localization of FDI flows: Evidence on Infrastructure as a Critical Determinant. Working Paper. SSRN. (Unpublished)
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The localization of Foreign Direct Investment (FDI) to a few economies represents a puzzling aspect of international business. We study the provision of public infrastructure as a determinant of such localization. We employ unique data at the district level in India. We identify using variation: (i) among sectors within a district depending upon the sector’s propensity to attract FDI at the national level; and (ii) FDI into surrounding districts. We find that FDI inflows remain insensitive to changes in infrastructure till a threshold is reached; thereafter, FDI inflows increase steeply with an increase in infrastructure. This non-linear effect potentially explains why FDI remains restricted to a few countries.
| Affiliation: | Indian School of Business |
|---|---|
| ISB Creiators: |
ISB Creators ORCiD Subramanian, K UNSPECIFIED |
| Item Type: | Monograph (Working Paper) |
| Uncontrolled Keywords: | BRIC, District, Infrastructure, FDI, India, International Corporate Finance, International Business, MNE |
| Subjects: | Finance |
| Depositing User: | Ilayaraja M |
| Date Deposited: | 09 Jun 2019 11:35 |
| Last Modified: | 09 Jun 2019 19:18 |
| URI: | http://eprints.exchange.isb.edu/id/eprint/1053 |
| Publisher URL: | http://dx.doi.org/10.2139/ssrn.1712185 |
| Related URLs: |
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