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Investigation of Foreign Institutional Investors (FIIs) in India

Author

Listed:
  • Batra, Gunjan

    (Department of Information Systems and Security, Kennesaw State University, Georgia, USA)

  • Suppiah, Nithiyananthan

    (Department of Information Systems and Security, Kennesaw State University, Georgia, USA)

  • Dembla, Pamila

    (Department of Information Systems and Security, Kennesaw State University, Georgia, USA)

  • Kumar, Nand

    (Department of Humanities, Delhi Technological University, Delhi, India)

Abstract

The role of foreign investment in promoting economic growth has received considerable attention in India since 1990s. An important feature of the development of Indian stock market in the last twenty years has been the growing participants of foreign investors. Though numerous research studies have been conducted in respect of Foreign JIBC July 2023, Vol. 28, No.4 Institutional Investors (FIIs) into India, most of them have restricted their assessment to the impact of stock markets on FIIs investment flow in India. Very few studies have focused on the aggregate impact of macro-economic variables such as inflation, money supply, Index of Industrial Production (IIP), gold, crude oil, etc on FII flows in India. Given this background this study assesses the determinants (using various macroeconomic factors) of FIIs flows in India. We used regression analysis to determine that during the period 2011-2020, Sensex, risk in Indian securities market, dollar-INR exchange rate, gold rate, crude oil rate, interest rates in USA and India were the statistically significant determinants of FIIs in India. This study will enable policy makers, regulators and investors to understand FII flows, to develop better policies and take informed decisions related to FIIs and the factors that impact their flow. This wills in-turn lead to better development of the Indian economy.

Suggested Citation

  • Batra, Gunjan & Suppiah, Nithiyananthan & Dembla, Pamila & Kumar, Nand, 2023. "Investigation of Foreign Institutional Investors (FIIs) in India," Journal of Internet Banking and Commerce, , vol. 28(04), pages 01-12, July.
    • Handle: RePEc:ris:joibac:0024
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    More about this item

    Keywords

    Foreign Institutional Investment; FII; Determinants; Indian economy;
    All these keywords.

    JEL classification:

    • A11 - General Economics and Teaching - - General Economics - - - Role of Economics; Role of Economists

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