Exploring determinants impacting foreign direct investment in the real estate sector: a study on the Indian economy
Abstract
Purpose
Foreign direct investment in the real estate (FDIRE) sector is required to bridge the gap between investment needed and domestic funds. Further, foreign direct investment is gaining importance because other sources of raising finance such as External Commercial Borrowing and foreign currency convertible bonds have been banned in the Indian real estate sector. Therefore, the objective of the study is to explore the determinants attracting foreign direct investment in real estate and to assess the impact of those variables on foreign direct investments in real estate.
Design/methodology/approach
Johansen cointegration test, vector error correction model along with variance decomposition and impulse response function are employed to understand the nexus of the relationship between various macroeconomic variables and foreign direct investment in real estate.
Findings
The results indicate that infrastructure, GDP and tourism act as drivers of foreign direct investment in real estate. However, interest rates act as a barrier.
Originality/value
This article aimed at exploring factors attracting FDIRE along with estimating the impact of identified variables on FDI in real estate. Unlike other studies, this study considers FDI in real estate instead of foreign real estate investments.
Keywords
Acknowledgements
Throughout the writing of this paper, I have received a great deal of support and assistance. This research would not have been possible without the valuable contribution of many people. Firstly, I would like to express my sincere gratitude to my guide Dr Miklesh Yadav, Amity College of commerce and finance, Amity University, Noida, for the continuous support during my study and related research, for his patience, motivation and immense knowledge. He provided me with the tools that I needed to choose the right direction and successfully complete my manuscript. His guidance helped me in all the time of research and writing of this manuscript. The door of his office was always opened whenever I ran into trouble or had a question about my research or writing. Without his precious support, it would not be possible to conduct this research. I am thankful to research scholar Munesh Kumar, Haryana School of Business, Guru Jhamsarbeshwar University of science and technology, Hisar, Haryana. He helped me to fine-tune my manuscript work. I am thankful to him for providing unconditional support in completing my research. I am thankful for their insightful comments, continuous support and resolution to problems whenever I needed. I felt heartfelt appreciation to countless others who have contributed to their piece of knowledge both unequivocally and unconditionally. Thanks for all your encouragement!
Citation
Mehta, N., Gupta, S. and Maitra, S. (2024), "Exploring determinants impacting foreign direct investment in the real estate sector: a study on the Indian economy", Property Management, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/PM-02-2022-0012
Publisher
:Emerald Publishing Limited
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