International Research Journal of Commerce , Arts and Science

 ( Online- ISSN 2319 - 9202 )     New DOI : 10.32804/CASIRJ

Impact Factor* - 6.2311

**Need Help in Content editing, Data Analysis.

Research Gateway

Adv For Editing Content

   No of Download : 34    Submit Your Rating     Cite This   Download        Certificate


    1 Author(s):  DR.RAJNI

Vol -  3, Issue- 3 ,         Page(s) : 210 - 225  (2012 ) DOI :


In this paper we analyze these flows and try to show the impact of stock market return, exchange rate and growth of Indian economy on FII on the basis of monthly data for the period January 1994 to September 2011. We found that there is a significant impact of the return on stock market, exchange rate and index of industrial production on FII. The two way inter-relationship between FII and return of stock market open things up for wider economic analysis. The long run and short run relationship have been deciphered by using the ECM methodology by taking into account the macroeconomic variables and FII into account. We find short run and long run impact of exchange rate on FII but only short run in the reverse direction. FII has short run impact on growth of Indian economy but no impact is found in long run.

• Aggarwal, R.N (1997), “Foreign Portfolio Investment in Some Developing Countries: A Study of Determinants and Macro Economic Impact”, The Indian Economic Review, VOL.XXXII (2), PP-217-229.
• Ahmed, K.M, Ashraf S., and A. Ahmed (2005). ‘An Empirical Investigation of FII’s role in the Indian equity Market’. ICFAI Journal of Applied Finance 11 (8): 21-33.
• Badhani, K.N. (2005). ‘Dynamic Relationship Among Stock Prices, Exchange Rate and Net FII Investment Flow in India’. From Internet File URL:
• Bose Suchismita and Coondoo Dipaankar (2005): “The Impact of FII Regulations in India”, Journal: International Journal of financial market trends. Vol 30. Publisher: MCB UP Ltd Chakrabarti (2001), Journal: Journal of foreign institution investments Vol 27. Publisher: SSRN Group Publishing Limited
• Chakrabarti, Rajesh (2001), “FII Flows to India: Nature and Causes”, Money and Finance, VOL.2, Issue 7. Oct-Dec.
• Dodd, Randall (2004) “Managing the Economic Impact From Foreign Capital  Flows”, Informal Hearings of Civil Society on Financing for Development, UN Headquarters, 22 March 2004.
• Gompers, P., Metrick, A., 2001. Institutional Investors and Equity Prices. The Quarterly Journal of Economics. 116, 229-259.
• Gordon, James and Poonam Gupta (2003) “Portfolio Flows into India: Do Domestic Fundamental Matter?” IMF Working Paper, No03/20.
• Han, B. and Wang, Q. (2004). Institutional investment constraints and stock prices. Dice Center for Research in Financial Economics 2004, Working Paper No,2004-24
• Henry, P.B. (2000). Stock market liberalization, economic reform, and emerging market equity prices. Journal of Finance, American Finance Association, Vol. 55, No.2, 529-564.
• Li, Q. (2002). Market opening and stock market behaviour: Taiwan’s experience. International Journal of Business and Economics, Vol. 1, No. 1, 9-15.
• Kumar, S. (2001). ‘Does the Indian Stock Market Play to the tune of FII Investments? An Empirical Investigation’. ICFAI Journal of Applied Finance 7 (3): 36-44.
• Lin, A. and Chen, C.Y. (2006). The impact of qualified FII on Taiwan's Stock Market. Web Journal of Chinese Management Review, Vol.9, No.2, 1-27.
• Mazumdar, T. (2004). ‘FII Inflows to India; Their effect on stock market liquidity’. ICFAI Journal of Applied Finance 10 (7): 5-20.
• Mishra, D. Mody, A. and Murshid, A.P. (2001), “Private Capital Flows and Growth”, A Quarterly Magazine of IMF, VOL.38, No (2).
• Michael Frenkel and Lukas Menkhoff (2003) “Are Foreign Insutional Investors Good for Emerging Markets? “, Discussion paper No. 283, September
• Prasanna, P.K (2008), Foreign Institutional Investors: Investment preferences in India, JOAAG, Vol 3, No-3
• Panda, C. (2005). ‘An Empirical Analysis of the Impact of FIIs’ on Investments in the Indian Stock Market’. ICFAI Journal of Applied Finance 11(1): 53-61.
• Rakshi, Mihir (2006) “On Liberalizing Foreign Instuitional Investment”, Economic and Political Weekly, March 18.
• Richards, A. (2004). Big fish in small ponds: The momentum investing and price impact of foreign investors in asian emerging equity markets. Journal of Financial and Quantitative Analysis, Vol. 40, No. 1.
• Rai Kulwant & Bhanumurthy N R (2003) : “Determinants of Foreign Institutional Investment in India”, Journal: Journal of Institutional Investors . Vol 15. Publisher: Emerald Group Publishing Limited
• Richard A.Ajayi and Mbodja Mougou of Wayne State University (2001) : “On the dynamic relation between stock prices and exchange rates” , Journal: Journal of ICFAI, Vol: 25. Publisher: MCB UP Ltd.
• Sikdar Soumyen (2006) : “Foreign Capital Inflow into India: Determinants and Management”, Journal: Journal of Institutional Investors . Vol 17. Publisher: Emerald Group Publishing Limited.
• Stanley Morgan (2002),“FII’s influence on Stock Market”, Journal: Journal of impact of Institutional Investors on ism. Vol 17. Publisher: Emerald Group Publishing Limited
• Tesar, L.L. and Werner, I.M. (1995), U.S. equity investment in emerging stock markets. World Bank Economic Review, Oxford University Press, Vol. 9, No.1, 109-29.
• Trivedi, Pushpa and Abhilash Nair (2003); “Determinants of FII Investment Inflow to India”, Presented in 5th Annual conference on Money & Finance in The Indian Economy, Indira Gandhi Institute of Development Research, January 30 – February 1, 2003      

*Contents are provided by Authors of articles. Please contact us if you having any query.


Bank Details