The Economic and Social Impacts to India and Its Citizens from Inward Foreign Direct Investment

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5.3: Methodological approach

The overall methodological perspective is informed by interpretivism. This thesis shares with interpretivist sociology the need to understand the complexity of human experience from the point of view of those living it (Schwandt, 1998). Thus, the fieldwork predominately took place in India using qualitative face to face interviews. It is also worth noting that this thesis also contains strains of a ‘privileged interest’ theory in situating business apart as a special case within the political economy. The privileged interest thesis posits that business has capabilities to steer, constrain and influence policy makers at national and international levels that are not open to other groups of actors (Farnsworth, 2004). However, the position of this thesis aligns itself alongside the work of Farnsworth (2004), Vogel (1989) and Hacker and Pierson (2002) who argue that while business has interests that are privileged, their power is variable and surmountable.

The empirical component to this research utilises a qualitative case study of India. Case studies systematically investigate an event, setting, or subject or a set of related subjects with the aim of understanding the case or multiple cases (Silverman, 2005; Berg, 2007). Berg (2007, p.284) describes the case study in the following way:

By concentrating on a single phenomenon, individual, community, or institution, the researcher aims to uncover the manifest interaction of significant factors characteristic of this phenomenon, individual, community, or institution. But, in addition, the researcher is able to capture various nuances, patterns, and more latent elements that other research approaches might overlook.

Case study methodologies are often best suited for complex studies when an incorporation of various methods, including qualitative and quantitative methods are needed (Mangen, 2004; Baxter and Jack, 2008).

Stake (1995) identifies three types of case studies: intrinsic, instrumental and collective. The collective case study method involves an extensive study of multiple cases which are intended to bring forth a better understanding or an enhanced ability to hypothesise about the wider research aim (Stake, 1995; Berg, 2007). The other two types of case studies—intrinsic and instrumental— are relevant to this research project. Intrinsic case studies describe the particular case and that case specifically (Stake, 1995; Silverman, 2007, Berg, 2007). It makes no attempt to generalize beyond that particular case, test or develop new theories (Stake, 1995; Silverman, 2007; Berg, 2007). Berg (2007) and Creswell (2007) explicate that intrinsic case studies are pursued when the researcher wants to understand an individual case and it is the uniqueness or ordinary nature of the case that is of particular interest. Instrumental case studies, on the other hand, are conducted to provide insight into an issue or revise a theoretical explanation (Stake, 1995; Silverman, 2007; Berg, 2007). The case(s) plays a supporting role to the theoretical issue or concern. Stake (1995; 1998) emphasises that because researchers often have multiple interests, there is no solid line drawn between intrinsic and instrumental studies.

The blurring of boundaries between instrumental and intrinsic case studies holds true for this thesis. The intent of this research project has elements of both intrinsic and instrumental characteristics. While it does not attempt to create grounded theory or test a particular theory, it does attempt to examine the larger issue concerning the impact of FDI within developing countries. India was chosen because of its particular unique characteristics such as its service sector dominance and, simultaneously, the similarities that it has with other developing countries actively seeking FDI. India is one of the newly advanced developing economies which are a popular destination for FDI. Thus, India was chosen because of both its unique and ordinary characteristics in investigating a larger theoretical concern which is to better understand the impact of FDI and on a developing economy. However, as explored, the impact of investment in host economies are dependent upon numerous factors that are context specific to the industry, the company, the regulatory environment of the host country as well as the time frame of the research to name but a few (OECD, 2002; 2008). Thus, due to the number of context specific variables involved with this topic, the generalizability of this study becomes limited as India’s experience with FDI and the costs and advantages afforded will be unique. Verschuron (2003) observes that single case studies invite criticisms pertaining to the limitations of the method in both analytical capability and generalizability. However, Feagin et al (1991) surmise that single case studies can be the best suited methodology when a holistic and in-depth investigation is in need. A single case study as opposed to a collective case study was chosen primarily because of time and monetary constraints. As many variables are intricately involved in determining the impact FDI plays in a country’s development, comparing countries may have resulted in a loss of breadth and depth in terms of analysis during the time period I had to complete this project.

India was chosen specifically for several reasons. First, India is a democratic country and I felt this would provide a level of transparency in both the interviews and documentary analysis. I surmised that discussions concerning corruption and the government’s ability to frame investment policies could be more critically evaluated by participants in a democratic country. India liberalised its economy and opened its markets in 1991. It was felt that the amount of time from liberalisation to today - 24 years - is enough for the impact of FDI to be observed quite clearly. It is enough time for the spillovers to have been somewhat absorbed and/or negative impacts such as the formation of monopolies to have occurred or certainly be visible on the horizon. Yet, it is still newly liberalised enough for some interviewees to remember the years of the closed economy and thus provide a rich description and comparison of the two periods. India was also chosen because of the widespread use of English. As discussed in Chapter Four (see section 4.2) Hindi is the language of the Indian state although English is used for administrative communication and also for higher education. All of my interviewees spoke fluent English and thus interpreters were not needed during the interview process. This provided ease of logistics and enabled deeper involvement in the interview process as opposed to using interpreters.

The next section will further describe the overall research design and my time in the field.

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