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Improved friendly relations, bilateral trade and stock markets: a causal relationship study of India and Israel

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  • Vandana
  • Shveta Singh

Abstract

The study aims to analyse India and Israel's bilateral trade ties and the dynamic relationship between both countries' equity markets following bilateral trade. The trade intensity index is utilised to examine the bilateral trade between the two countries, while the daily stock prices of NSE NIFTY of India and TA-125 of Israel for January 2000-December 2020 are used to analyse the association amid the bourse. The results of the two-step Engle-Granger co-integration test and the Granger causality test indicate that bilateral trade is an exogenous variable and the stock prices of these countries are co-integrated in the long run. Further, India is the net exporter, contributing approximately 5% to Israel's overall trade. Both countries have demonstrated effective financial and trade interdependency amid a slow development in their bilateral political depth.

Suggested Citation

  • Vandana & Shveta Singh, 2023. "Improved friendly relations, bilateral trade and stock markets: a causal relationship study of India and Israel," International Journal of Indian Culture and Business Management, Inderscience Enterprises Ltd, vol. 30(2), pages 273-290.
    • Handle: RePEc:ids:ijicbm:v:30:y:2023:i:2:p:273-290
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