The Effect of Entrepreneurship on Foreign Direct Investment in India

Abstract

Entrepreneurship has become an important and extensively researched concept in business studies.
Research on foreign direct investment (FDI) has become widespread due to the growth of FDI and its
importance in globalization. Most entrepreneurship studies examined the importance and influence of
entrepreneurial orientation in a micro-level context. On the other hand, studies and research
concerning FDI used statistical techniques to analyze the effect, determinants, and motives of FDI on
a macroeconomic level, ignoring empirical studies on other noneconomic determinants. In order to
bridge the gap between the theory and empirical evidence on FDI and the theory and research on
entrepreneurship, this study examines the impact of entrepreneurship on inward foreign direct
investment. The relationship between entrepreneurship and foreign direct investment is investigated
through regression analysis of pooled time-series and cross-sectional data. The results suggest that
entrepreneurship has a significant effect on FDI.

Keywords: Entrepreneurship, foreign direct investment, globalization, economic freedom.