Journal Press India^®

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This study examines the impact of source country factors on the inflow of foreign direct investment (FDI) into India between 2004 and 2013 with special reference to tax havens. In this paper, the FDI inflows in India are considered as function of relative GDP, relative GDP per capita, inflation, FDI openness, relative tax rates and tax haven dummy. The multiple regression (fixed effects) model on panel data is employed to identify the determinants of FDI inflows from top 20 source countries in India. The empirical results indicate that relative GDP per capita, source country FDI openness and inflation significantly affects FDI inflows in India. The results also verify that tax havens have special role to play.

Keywords

Foreign Direct Investment, Source country factors, Tax havens

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