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An Econometric Study Of Herding Behaviour Of Domestic Institutional Investors In Indian Capital Market: An Auto Regressive Distributed Lag Approach

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  • TOM JACOB

    (Dept. of Commerce, Christ College, Irinjalakuda, Kerala, India)

  • RINCY RAPHAEL

    (Sri Ramakrishna Engineering College, Coimbatore, Tamil Nadu, India)

  • AJINA V.S.

    (Christ College, Irinjalakuda, Kerala, India)

Abstract

The Indian equity market is one of emerging markets' best-performing and most promising markets. The funds that play a significant role in the Indian capital market are divided into two categories: domestic institutional flows and foreign institutional flows. There have been several studies on the flows of funds from foreign institutional investors, but only a few studies on domestic institutional investors have been conducted. Using monthly data from 2007 to 2021, this research study focuses on the impact of domestic institutional investment flow on the performance of stock market indexes. The study takes into account two sorts of variables: net flows of domestic institutional investors and the Sensex index. The data was obtained from the Reserve Bank of India's official website. The Granger Causality Test and the Auto Regressive Distributed Lag (ARDL) model reveal that domestic institutional investors have no beneficial impact on the Sensex since their investments have a short run impact on the index's movement during the entire study period.

Suggested Citation

  • Tom Jacob & Rincy Raphael & Ajina V.S., 2022. "An Econometric Study Of Herding Behaviour Of Domestic Institutional Investors In Indian Capital Market: An Auto Regressive Distributed Lag Approach," Review of Economic and Business Studies, Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, issue 29, pages 29-46, June.
    • Handle: RePEc:aic:revebs:y:2022:j:29:jacobt
    DOI: 10.47743/rebs-2022-1-0002
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    References listed on IDEAS

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