| Abstract [eng] |
During Covid-19, India faced several difficulties, including supply chain disruptions, labour migration, and industrial interruptions. A combination of these factors has had a negative influence on the workforce of service sector businesses as they are primarily dependent on people. Also, there was a decrease in FDI inflows in the Indian service sector during the outbreak of Covid-19, according to the FDI inflows data obtained for this research. FDI inflows and service sector employee count were both adversely impacted by Covid-19, with both showing a downward trend. This behaviour suggested the relationship between these two. The literature review of this study shows that factors like human capital, population, geopolitics, internet penetration, and national resilience as well as stability in governance and fiscal policy & concessions influenced FDI inflows and outflow. The previous literature does not mention any information regarding FDI inflows and workforce size relationship, in order to address this research gap, the research question is formed and data analysis is performed to identify the relationship between FDI inflows and employment in the Indian service sector industries. The correlation test is used to detect the relationship between two variables, which are FDI inflows in Indian service sector industries and employee count in the Indian service sector industries. To analyse the dependency of these two-time series variables, the Granger causality test is used. Data analysis tests were conducted to test the hypotheses, and it is discovered that FDI inflows show a positive correlation trend with employment growth in the Indian service sector industries, which supported the hypothesis that FDI inflows have a correlation with the number of employees in the selected service sector industries in India. According to Granger's causality test, FDI inflows in the service sector and the number of service-sector employees do not have a direct cause-effect relationship between them. A possible explanation of this could be that foreign direct investment produces a long-term growth economy by offering technology transfer, which draws the biggest FDI equity flow in the service sector, which might increase the need for employment but it might not be detected parallelly. Also, the FDI inflows are not just focused on market expansion but also on lateral development, such as technical progress and sustainability. |
