Home Country Institutions as Predictors of FDI in India

Journal of Asia Business Studies, Vol. 3, No. 1, 2008, pg 12-22

Posted: 30 Dec 2008 Last revised: 8 Jun 2012

See all articles by Jamie D. Collins

Jamie D. Collins

Sam Houston State University

Dan Li

Shanghai Maritime University (SMU) - School of Economics and Management

Purva Kansal

Panjab University - University Business School

Date Written: December 1, 2008

Abstract

This study focuses on home country institutions as sources of variation in the level of foreign investment into India. Our findings support the idea that institutional voids found in India are less of a deterrent to investments from home countries with high levels of institutional development than from home countries with similar institutional voids. Overall, foreign investments in India are found to be significantly related to the strength of institutions within home countries. The levels of both approved and realized foreign direct investment (FDI) are strongly influenced by economic factors and home country regulative institutions, and weakly influenced by home country cognitive institutions. When considered separately, the cognitive institutions and regulative institutions within a given home country each significantly influence the level of approved/realized FDI into India. However, when considered jointly, only the strength of regulative institutions is predictive of FDI inflows.

Keywords: fdi, institutions, india

Suggested Citation

Collins, Jamie D. and Li, Dan and Kansal, Purva, Home Country Institutions as Predictors of FDI in India (December 1, 2008). Journal of Asia Business Studies, Vol. 3, No. 1, 2008, pg 12-22, Available at SSRN: https://ssrn.com/abstract=1321797

Jamie D. Collins (Contact Author)

Sam Houston State University ( email )

Box 2056
Huntsville, TX 77341
United States

Dan Li

Shanghai Maritime University (SMU) - School of Economics and Management ( email )

No. 1550 Pudong Avenue
Pudong New Area
Shanghai, 200135
China

Purva Kansal

Panjab University - University Business School ( email )

Chandigarh, 160014
India

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