Journal Press India^®

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In the era of globalisation, economic growth is considered as the most viable approach to achieve socio-economic development goals in developing economies. Consequently,  the proponents of globalisation are vigorously advocating the enhancement of FDI and trade openness. In this context, the recent literature on economic growth in developing economies has mainly focused on relationship nexus of economic growth, trade openness and foreign direct investment (FDI). However, the numerous research studies carried out throughout the world have found mixed results about the nexus between the stated constructs. Against this backdrop the present study has been undertaken to further analyse the nexus of economic growth, trade openness and FD in India and China. It is found that in long-run, the results reveal support for both export-led and FDI-led economic growth hypothesis in India, whereas in China support was found only for FDI-led growth hypothesis. However, in short-run support for export-led growth was found only in case of China. ​

Keywords

Economic Growth; Exports; FDI; Imports; VECM

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