Journal Press India^®

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This paper reviews the extant literature in the context of FDI, employment and shadow economy. An attempt has been made to review papers published in various geographies in order to arrive at a convincing set of conclusions based on the study. The findings of this study reveal that FDI has a positive impact on the overall economy; however, the result for employment varies on a country-to-country basis. Further, the literature available in the context of informal economy has mainly concentrated on its measurement and few studies have attempted to relate it with FDI, trade liberalization, institutional quality, and corruption. The literature in the context of India is almost negligible for overall informal sector. The results deciphered are inconclusive as studies tend to reveal both significant and insignificant results for different variables. Some studies reveal that FDI increases informality which others find contrary to it.

Keywords

FDI; Informal Sector; Informality; Shadow Economy; Trade Liberalization

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