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Analyzing Structural Breaks in India’s Outward Foreign Direct Investment using Generalized Kinked Exponential Model

Vol 7 , Issue 2 , July - December 2020 | Pages: 45-65 | Research Paper  

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Author Details ( * ) denotes Corresponding author

1. * Anindita Goldar, Assistant Professor, Commerce, PGDAV College, University of Delhi, Delhi, India (

This paper analyses the trends in India’s OFDI flows during the period 1992 to 2018 using the kinked exponential growth model for identifying the breaks in the growth rate based on the important phases of the evolution of India’s foreign investment policy and examining the impact of the global financial crisis. Based on inspection of the movement of India’s OFDI flows and preliminary analysis three kinks were assigned to the years 2000, 2009, and 2014 respectively. The results reveal that India’s policy liberalization especially the introduction of FEMA in the year 2000, significantly bolstered the growth rate of India’s OFDI flows. The results further show that India was adversely affected by the financial crisis resulting in a sharp decline in the growth rate of OFDI. However, a rebound is seen since 2014 in India’s OFDI flows indicating that the future trend and outlook of outbound investments remain increasingly promising. A similar analysis was also conducted for examining the trends of India’s share in total developing countries’ OFDI flows. The results show a pattern very similar to that in India’s OFDI flows.


Outward foreign direct investment; Trend analysis; Kinked exponential growth model; India.

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