The antecedent to economic effects of foreign direct investment (FDI) has been investigated in this study as FDI positively and negatively affecting a home country’s economy as well as host country’s economy. Extensive literature review on international business activities reveals that the economic effects of FDI are one of its outcomes such as determinants of FDI, trade effects of FDI and policy outcomes of outward foreign direct investment and inward foreign direct investment. The purpose of this study is to empirically test the relationship between the main sector’s intensity and FDI volumes in the context of the Indian market. POLS and fixed-effect models were used to test the hypothesis. The research model is built around the factors of Korean main sectors, Indian main sectors, and FDI volume. Transportation, telecommunication, and electrical equipments were the proxy for Korean main sectors. Matallugical, fules, boilers & steam gen. plants and prime movers were the proxy for Indian main sectors. outward foreign direct investment volume and inward foreign direct investment, on the other hand, served as proxy for FDI volume. The result supports our prediction that the main sector’s intensity is significantly related to FDI volumes in the context of outward and inward foreign direct investment. Based on the findings of this study, related implications and future avenues for research are also discussed.
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