英语论文网

ly 2% in 1997. secondly, the share of manufacturing sector, which declined marginally between 1980 and 1990 (from 87 to 85%), fell significantly after liberalisation to 48% in 1997. during the 1990s, IT services clearly emerged as a significant FDI recipient. The FDI stock was more evenly distributed across manufacturing subsectors in 1997, in contrast to the very heavy concentration in

( FDI in India, monuj kumar tamuli, akansha publishing house. Foreign ventures in India, shivanna shiraramu, Scandinavian university booksThe institute of business studies university of Uppsala 1967)

Sustainability of the industry in worst scenario in the year

The fiscal year 1998-99 was characterised by the Indian economy going through its worst phase (% growth of GDP was 5.8% in 1998-99 vis-à-vis 7.8% in 1996-97); industrial growth reached a low (index of industrial production was 4% in 1998-99 dropping from 6.6% in 1997-98); exports growth declined considerably over the previous year registering –1.1% in 1998-99 from 1.6% in 1997-98. The IT industry however showed only a marginal fall in the annual growth rate from 18% in 1997-98 to 17.8% in 1998-99 indicating the sustaining power of the industry.

(Source: The Indian IT industry, NASSCOM)

2.13 Foreign direct investment model

In literature history of FDI there are basically two widely used models, the horizontal (HOR) and the vertical (VER). In the horizontal model formulated by Markusen (1984) studies how different multinational enterprise (MNE) produces their own unit in other countries minimize the costs involved in trading and firm-specific assets. Whereas in the vertical model which is developed by Helpman (1984) FDI with a purpose of taking advantage in factor price differences between countries. lately these two approaches were combined in a unified approach which was further named as “the knowledge-capital” (KK) model of Markusen (2002) Markusen and Maskus (MM, 2002) suggest that a key method of distinguishing between HOR and VER motivations for FDI is to analyze the relationship between countries’ relative factor endowments and FDI. While the patterns are very complex when it comes to conduct an analytical statement, multinational activity is usually classified into horizontal FDI and vertical FDI. A firm becomes multinational when through FDI it establishes in more than two countries wherein the parent company practices limited ownership control.

The horizontal model of FDI

The horizontal model was first brought into existence by Markusen (1984). Horizon FDI approach is understood as locating production to be closer to customers and avoid trade costs (Markusen, 1984; Brainard, 1993). A firm engages in horizontal FDI when it replicates a subset of its activities or production process in another country, in other words, when the same (horizontal) state of the production process is duplicated. A firm, for example, may set a foreign plant in addition to a home plant for some part of the production process. The factor that mainly motivates the company to be global is the potential savings and trading costs.

(Intra-Industry Foreign Direct Investment, Laura Alfaro, Andrew Charlton 2000)

Horizontal FDI from Parent I to Host

(Hunting High and Low for Vertical FDI, International Economics, 2008Ronald B. Davies)

In horizontal m