CONSTRUCTION OF COMPOSITE INDEX OF LEADING INDICATORS FOR FDI CYCLE FOR BRICS ECONOMIES.
- Assistant Professor, Department of Economics, Sri Sathya Sai Institute of Higher Learning Prasanthi Nilayam-515 134, Andhra Pradesh, India.
- Assistant Professor, Department of Economics & Finance, BITS Pilani, Pilani Campus, Vidya Vihar- 333031, Rajasthan, India.
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FDI plays an important role in economic growth. In this paper, we study the long term dynamics of FDI and we propose a composite index of leading indicators for FDI Cycle for the BRICS economies. The period of study is 1996 to 2014. After carefully selecting the choice variables for the leading indicator which include exchange rate, total factor productivity, human capital, gross domestic product growth, gross capital formation and trade, we use the Principal Component Analysis (PCA) to construct the index for the FDI cycle. It is found that all the above mentioned variables will be helpful in predicting the turns i.e peaks and trough in the FDI cycle which is important from policy perspective.
[Dinesh Kumar Choudhury and Rajendra Narayan Paramanik. (2016); CONSTRUCTION OF COMPOSITE INDEX OF LEADING INDICATORS FOR FDI CYCLE FOR BRICS ECONOMIES. Int. J. of Adv. Res. 4 (Dec). 1284-1294] (ISSN 2320-5407). www.journalijar.com
Assistant Professor, Department of Economics, Sri Sathya Sai Institute of Higher Learning Prasanthi Nilayam-515 134, Andhra Pradesh, India
