India’s Outward Foreign Direct Investment: Closed Doors to Open Souk

Abstract: Spectacular liberalisation of trade and investment policies opened the floodgate of capital flows in and out of India from the mid 1990s. This colossal capital flows facilitated the rapid economic growth and raised the country’s profile as one of the super powers in the region. The recent surge of outward foreign direct investment (OFDI) from India has a significant balance of payments as well as enormous socio economic effect in securing the country’s position as a new economic power in the global context. Since the study on the OFDI is sparse, this paper attempts to contribute to the literature by examining the major determinants of OFDI from India using the cointegration and Vector Error Correction Model over 1970 and 2009. The results of our study indicate that the dramatic financial and trade liberalisation has instigated the gigantic outflow of investment and acquisition by India’s firms. Furthermore, the domestic economic environment including the growing human capital stocks, increasing international competitiveness, large influx of inflow of foreign capital and increased domestic savings are positively and significantly influencing India’s huge outward capital flows in recent decade. However, improvement in domestic technological capabilities, rising standard of living and increased interest rates are deterrents to the OFDI of the country in the long run. Granger causality test also indicates that while all the above mentioned independent variables are Granger causing OFDI, nevertheless, outward FDI does not Granger cause any of the factors determining the OFDI from India.Keywords: Inward FDI, Outward FDI, Economic Growth, India, Cointegration, VECM, Endogeniety test, Granger Causality Test

Real Exchange Rates and International Competitiveness of SAAR Countries: An Analysis of Bangladesh, India, Pakistan and Sri-Lanka for 1960-2000

In an attempt to measure the intra and international trade competitiveness, we construct the indices of real exchange rate (RER), the conventional measure of competitiveness, for four major South Asian Association of Regional Cooperation (SAARC) nations using annual data for the period of 1960-2000. The objective of the study is to examine the performances of the sampled countries especially after the economic reforms through trade liberalisation that have been taken place under South Asian Preferential Trading Arrangement (SAPTA) and comparing the evolution in Bangladesh, India, Pakistan and Sri Lanka. Our empirical results reveal that in terms of intra regional trade the smaller countries, namely Bangladesh and Sri Lanka reap the higher gains from openness in their trade regime. However, Bangladesh and India gained international competitiveness not until mid 1990s. Movements of Real exchange rates for Pakistan and Sri Lanka indicate that trade liberalisation efforts did not seem to have much positive gain in terms of international trade.SAARC, SAPTA, SAFTA, Trading Bloc, Intra- and international Competitiveness, Real exchange rate, Openness in trade regime

Modal analysis of gravitational instabilities in nearly Keplerian, counter-rotating collisionless discs

We present a modal analysis of instabilities of counter-rotating, self-gravitating collisionless stellar discs, using the recently introduced modified WKB formulation of spiral density waves for collisionless systems (Gulati \& Saini). The discs are assumed to be axisymmetric and in coplanar orbits around a massive object at the common center of the discs. The mass in both discs is assumed to be much smaller than the mass of the central object. For each disc, the disc particles are assumed to be in near circular orbits. The two discs are coupled to each other gravitationally. The perturbed dynamics of the discs evolves on the order of the precession time scale of the discs, which is much longer than the Keplerian time scale. We present results for the azimuthal wave number $m=1$ and $m=2$, for the full range of disc mass ratio between the prograde and retrograde discs. The eigenspectra are in general complex, therefore all eigenmodes are unstable. Eigenfunctions are radially more compact for $m = 1$ as compared to $m = 2$. Pattern speed of eigenmodes is always prograde with respect to the more massive disc. The growth rate of unstable modes increases with increasing mass fraction in the retrograde disc, and decreases with $m$; therefore $m=1$ instability is likely to play the dominant role in the dynamics of such systems.Comment: 24 pages, 8 figures, 1 tabl

Fertility, Education and Development: Further Evidence from India

There has been a significant decline in fertility in many parts of India since the early 1980s. This paper reexamines the determinants of fertility levels and fertility decline, using panel data on Indian districts for 1981 and 1991. We find that women's education is the most important factor explaining fertility differences across the country and over time. Low levels of child mortality and son preferences also contribute to lower fertility. By contrast, general indicators of modernization and development such as urbanisation, poverty reduction, and male literacy bear no significant association with fertility. En passant, we probe a subject of much confusion - the relation between fertility decline and gender bias.Fertility, demographic transition, female literacy, India