The purpose of this paper is to provide directions for advancing the research on determinants of outward foreign direct investment (FDI) from India.
The paper uses literature review as a method to identify a research gap in the literature on internationalization of Indian firms.
The synthesis of the theoretical debate and empirical studies conducted in context of EMNEs, with a particular focus on India and preliminary examination of data on cross-border acquisitions as well as institutions in India lead us to argue for the consideration of institutions at sub-national level (Indian states) in examining the determinants of outward FDI from India. The paper also proposes a conceptual framework relating to the mechanism through which institutions at the state level in India affect the propensity of firms to invest overseas.
Since the propositions are not tested empirically, the paper does not provide conclusive results.
In addition to providing the synthesis of the theoretical debate and empirical studies, paper is, to the best of author’s knowledge, the first one to present a conceptual framework relating institutions at sub-national level with the outward foreign direct investment from India.
