DETERMINANTS OF PRIVATE FOREIGN INVESTMENT IN POST REFORM INDIA

The main focus of this paper is to identify proximate determinants of private foreign investment, foreign direct investment and foreign portfolio investment in post reform India, using quarterly data of the variables over the period from September 1991 to June 2001 and analysed using multiple regression. The study found that share prices, exchange rate, institutional investment, infrastructure, London Inter Bank Offered Rate and skilled personnel are attracting more foreign investment. Likewise, share price, industrial production, infrastructure, London Inter Bank Offered Rate and mandays lost will draw more direct foreign investment. In the case of foreign portfolio investment, share prices, exchange rate, infrastructure, London Inter Bank Offered Rate and treasury bills are found to be the important determinants of post-reform India.