Investigating the Determinants of Foreign Institutional Investor Inflows in Indian Equity Market: An Application of the Augmented Autoregressive Distributed Lag Bounds Testing Approach-Reference-Cited by-同舟云学术

Investigating the Determinants of Foreign Institutional Investor Inflows in Indian Equity Market: An Application of the Augmented Autoregressive Distributed Lag Bounds Testing Approach

Published:2023-08-30 Issue:5 Volume:71 Page:805-819
ISSN:0019-4662
Container-title:The Indian Economic Journal
language:en
Short-container-title:The Indian Economic Journal

Author:

Kumari Madhu¹^ORCID,Bhattacharjee Animesh²^ORCID,Debnath Prallad¹,Das Joy¹^ORCID

Affiliation:

1. Department of Commerce, Tripura University, Agartala, Tripura, India

2. Faculty of Management and Commerce, ICFAI University Tripura, Agartala, Tripura, India

Abstract

The purpose of this study was to investigate the determinants of foreign institutional investors (FIIs) in the Indian equity market. For this purpose, the study has chosen country-specific push and pull factors for the period from January 2011 to December 2019. The beginning of the concerned period is marked by increased FII flows in the Indian market after the global financial crisis of 2008. The study has identified the stock market index of India, interest rate differential between India and the USA, inflation rate, and exchange rate as possible determinants of FII inflows in India and used the augmented autoregressive distributed lag (ARDL) approach based on the statistical properties of variables selected. The study found that in the long-run Indian stock market index, appreciating exchange rate, inflation, and interest rate differential are positively related to FII inflows in the Indian equity market whereas the US stock index is negatively related to FII inflows in India. JEL Codes: F30, G1

Publisher

SAGE Publications

Subject

General Medicine

Link

http://journals.sagepub.com/doi/pdf/10.1177/00194662231186559

Reference26 articles.

1. Determinants of foreign portfolio investment: the case of Jordan

2. Fund Flow of Financial Institutional Investors to Indian Stock Market: An Empirical Study

3. The Relation between Investment of Domestic and Foreign Institutional Investors and Stock Returns in India