Entrepreneurship Development In India: Role Of Foreign Direct Investment And Economic Growth

  • Dr. Kiran Yadav Project Consultant, Department of Educational Finance, National Institute of Educational Planning & Administration (NIEPA), New Delhi


Entrepreneurship Development is the key to India’s development .It is important as it utilized local resource, employment and rural development. As a startup founder or small business owner, you may think that you are simply working hard to build your own business and provide for yourself and your family .But you are actually doing a whole lot more for your local community, state, region and the country as a whole. Wealth Creation and sharing, Create Jobs, Balanced Regional Development, GDP and Per Capita Income, Standard of Living, Exports, and Community Development are the top seven important roles an entrepreneur plays in the economic development of a country .

Entrepreneurs occupy a central position in a market economy, For it’s the entrepreneurs who serve as the spark plug in the economy’s engine, activating and stimulating all economic activity. The economic success of nation worldwide is the result of encouraging and rewarding the entrepreneurial instinct.

This paper examines the impact of financial development, economic development and foreign direct investment on entrepreneurial development measured by production per MSME and fixed investment per MSME (Micro Small and Medium Enterprises) for the period of 1992-93 to 2015-16. Using Error correction model the result shows that investment per MSME is positively influenced by financial development in long run. In short run foreign investment and economic development positively influence fixed investments in MSMEs. Production per MSME was found to be positively influenced by economic development and financial development in long run while in short run none of the selected independent variables influence production of MSMEs.

KEYWORDS: MSME, Error correction model, FDI, GDP


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