Citation:

Provakar Das. "The Relationship between Trade Openness, FDI and Economic Growth: Evidence from China and India" International Research Journal of Economics and Management Studies, Vol. 3, No. 6, pp. 99-111, 2024.

Abstract:

This paper aims to evaluate the relationship between economic growth, trade openness and foreign direct investment (FDI). The investigation adopts an econometric-time series approach, using the panel data from 1982 to 2022 for both India and China, to infer the impact of trade openness and FDI on the economic growth of both the respective countries. The paper also assesses and interprets the correlation between economic growth, trade openness and FDI. The variables considered for this purpose are per capita GDP, trade as % of GDP and net inflows (% of GDP) for FDI, and an econometric regression analysis is performed using Granger Causality, Co-integration, VAR and VECM model.

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Keywords:

Trade openness; Foreign direct investment; Economic growth; India and China.