What question did this study set out to answer?

The aim is to analyze the relationship between FDI and domestic investment in India over a specified period.

A tale of two investments: a comparative analysis of foreign and domestic investment in India

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This research examines the impact of foreign investment on domestic investment in India, suggesting caution for policymakers.

The aim is to analyze the relationship between FDI and domestic investment in India over a specified period.
Data sourced from Q1 1997 to Q4 2019.
Used Gregory–Hansen cointegration test and ARDL bounds testing approach.
Evaluated stationarity of variables with Zivot-Andrews unit root test.
Confirmed a long-run relationship between FDI inflows and domestic investment.
Identified a significant crowding-out effect of FDI on domestic investment.
Found positive impacts of economic growth, financial development, and trade openness on domestic investment in both long and short run.

Sahoo et al. (2026) studied this question.

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