Motives of Foreign Multinational Firms Investing in India: A Comparison between Manufacturing and Services Sector

SMART JOURNAL OF BUSINESS MANAGEMENT STUDIES	VOL. 16	NO. 2	PAPER 7
10.5958/2321-2012.2020.00017.2
MOTIVES OF FOREIGN MULTINATIONAL FIRMS INVESTING IN INDIA: A COMPARISON BETWEEN MANUFACTURING AND SERVICES SECTOR

Alka Sanjeev* Mohd. Afaq Khan R. K. Wadhwa*
* School of Management and Business Studies, Jamia Hamdard, New Delhi Department of Business Administration, Aligarh Muslim University, Aligarh * Global Business Consultants, Ex-Prof IIFT

The study aims to determine the principal motives of inward foreign direct investment, by foreign multinational companies, in India. The study also seeks to ascertain if the motives of inward foreign investment of multinational firms differed between the manufacturing sector and the services sector. The paper employed a survey approach, to collect data about the motives and benefits of inward foreign direct investment, in India. Statistical tools, like confirmatory factor analysis, independent sample t-test, were used. The study identified that the market-seeking, resource-seeking, and efficiency-seeking motives differed significantly between the manufacturing sector and service sector firms. However, the study concluded that the strategic asset-seeking motive of foreign direct investment, in India, was not significant.

KEYWORDS: Foreign Direct Investment, Multinational Corporations, Motives of investment, internationalization, manufacturing, and services sector

JEL CLASSIFICATIONS: F230