Review of Professional Management- A Journal of New Delhi Institute of Management

Anjala Kalsie ¹

Affiliations
1 Faculty of Management Studies University of Delhi, Delhi-110007, IN

Abstract

Capital formation is an important determinant of economic growth. While domestic investments add to the capital stock in an economy, FDI plays a complementary role in overall capital formation and in filling the gap between domestic savings and investment. This paper attempts to examine the effect of two modes of FDI - Mergers &Acquisitions (M&As) and Greenfield FDI on GDP of a nation in different categories of countries - Developed Economies, BRICs and the 5 South East Asian (A5) nations. Using the VAR methodology, it was found that the GDP, cross border M&A and Greenfield FDI impact each other to some extent. There is a link between cross border M&A, Greenfield FDI and GDP. The extent varies according to the type of the country.

Keywords

FDI in Mergers & Acquisitions (M&As), Fdi in Greenfield Investment GDP, BRICS, East Asian Economics.

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Anjala Kalsie ¹, Chand Tandon ²

Affiliations
1 Fortune Institute of International Business, IN
2 NDIM, IN

Abstract

There can be no doubt, however, that the risks associated with capital account opening can be potentially severe; nobody denies this. But the challenge is to keep a measure of balance between those risks (which are typically stressed by the domestic producers of financial services) and the corresponding benefits (which affect a less vocal group, the domestic consumers of those services).

This paper focuses on the liberalization of capital account and that of domestic financial sectors. Although it's true that macro economic environment was equally important before going into capital account liberalization the same is not dealt in this paper The paper is divided as follows Section 2 talks about Capital Account Convertibility, Section 3 is about Prudential and Supen'isoiy Concerns, Section 4 deals with the Problems in Financial Sector Reforms and Section 5 finally Conclude.

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