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The pooling of the data for nine sectors over ten years will increase the degrees of freedom and also it will enable to explore the co-movement of the variables. It will also enable to allow the short-run dynamics to be potentially heterogeneous.There is a considerable amount of ambiguity in the quantitative data on FDI in India. It is mainly because of the discrepancy in defining the FDI data by different agencies. The Economic Survey (ES) includes American Depositary Receipts (ADRs) and the Global Depositary Receipts (GDRs) in the FDI inflows whereas the RBI considers ADR and GDR as portfolio investments. Thus, the figures on FDI as given by the Economic Survey overstate the FDI inflows. The FDI data at the sectoral level have been collected from various issues of Secretariat for Indust...
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