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Abstract

The Impact of Foreign Direct Investment on Innovation in India: An Analytical Study

Prof. B. Sudhakar Reddy

Professor of Economics and Director, ICSSR-SRC, Osmania University, Hyderabad.

163 - 169
Vol.19, Issue 1, Jan-Jun, 2025
Receiving Date: 2025-03-17
Acceptance Date: 2025-05-05
Publication Date: 2025-05-10
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http://doi.org/10.37648/ijps.v19i01.013

Abstract

This study explores the intricate relationship between Foreign Direct Investment (FDI) inflows and innovation in India, particularly during the post-liberalization period from 1991 to 2021. It critically examines theoretical perspectives and empirical trends to assess how FDI has influenced domestic innovation capabilities, as measured through indicators such as patent applications and gross expenditure on R&D (GERD). Drawing on a broad spectrum of economic theories—from early work by Kindleberger and Vernon to Dunning’s eclectic paradigm—the paper evaluates the dualistic nature of FDI: as a vehicle for advanced technology transfer and as a potential source of dependency.


Keywords: Foreign Direct Investment (FDI); Innovation; India; Technology Transfer; R&D; Patent Applications; Economic Reforms; Absorptive Capacity; Multinational Corporations; Liberalization.


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