FOREIGN INVESTMENT INFLOWS AND INDUSTRIAL SECTOR
          GROWTH IN INDIA- AN EMPIRICAL STUDY


            Mousumi Bhattacharya, Army Institute of Management, Kolkata, India

ABSTRACT: The paper aims to study the causal relationship between foreign investment
inflows and industrial sub-sectors growth pattern of the Indian economy during the post
liberalization period (1996-97:Q1 to 2009-10:Q2). The stationarity of the variables being
checked than Granger causality test is conducted in a multivariate VAR framework at VECM
form to identify if any causal relationship is there amongst the variables. Regression analysis
is also done with the same dataset. It is seen that industrial sector at the sub-sectoral level
influences foreign investment inflows.

Key words: Foreign investment inflows, Granger causality, industrial sector growth

JEL Codes: F21, O11