A Study on FDI in Education Sector and Its Impact on Gross Enrolment Ratio in Higher Education in India: An Econometric Approach
Keywords:
Co-integration, Foreign Direct Investment, Gross Enrolment Ratio, Granger Causality TestAbstract
Higher education in India has been lagging behind due to various reasons. According to statistics of 2015-16, published by Ministry of Human Resource Development (MHRD), about 24.5% of the population is enrolled in the institutes of higher education in the country. Education ministry came up with the proposal of 100% Foreign Direct Investment (FDI) in higher education in the country. In the present research we found the relationship between FDI in Education and Gross Enrolment Ratio (GER) in Higher Education in India. We used econometric techniques to find out the impact of FDI in Education on GER In higher education and also to find out the causal relationship. Both Variables are stationery at first difference i.e. I (I) as per ADF Test. The co-integration test result showed the existence of long-run relationship between Foreign Direct Investments in Education and Gross Enrolment Ratio in Higher Education. The result shows the long-run GER in Higher Education. Granger Causality test indicates a bi-directional relationship between FDI in education and Gross Enrolment Ratio in Higher Education because the probability value is less than 0.10 in both the null hypothesis tested.
References
Beugelsdijk, S., Smeets, R., & Zwinkels R. (2008). The impact of horizontal and vertical FDI on host country’s economic growth. International Business Review, 17 (4), 452-72.
Zhuang, H., (2008). Foreign Direct Investment and Human Capital Accumulation in China. International Research Journal of Finance and Economics, 19, 205-15.
Blomström, M., & Kokko A. (1994). Human capital and inward FDI. Discussion Paper No. 3762, Centre for Economic Policy Research, London.
Ram, Rati and Zhang, Kevin H. (2002). Foreign direct investment and economic growth: evidence from cross-country data for the 1990s. Economic Development and Cultural Change, 51(1), 205-15.
Borensztein, E., De Gregorio, J., & Lee J. (1998). How does foreign investment affect growth? Journal of International Economic, 45(1), 115-35.
Stijns, Jean-Philippe C. (2005). Natural resource abundance and economic growth revisited. Resources Policy, 30(2), 107-30.
Stijns, Jean-Philippe C. (2006). Natural resource abundance and human capital accumulation. World Development, 34(6), 1060-83.
Mahanta D., (2012). Impact of foreign direct investments on Indian economy. Research Journal of Management Sciences, 1(2), 29-31.
