Journal Article

The Clustering of FDI in India: The Importance of Peer Effects

Applied Economics Letters, 19 (8): 749-753

We assess the location choices of 6,020 foreign investors at the level of Indian districts. Employing conditional logit models, we find that clustering of FDI is driven strongly by herding among investors from both, the same and other countries of origin. However, the behaviour of non-resident Indians and German investors is strikingly different.


Peter Nunnenkamp
Megha Mukim