IDEAS home Printed from https://ideas.repec.org/p/ess/wpaper/id3097.html
   My bibliography  Save this paper

Integration of India’s Financial Markets on the Domestic and International Fronts: An Emperical Analysis of the Post-Liberalisation Period. June 2010

Author

Listed:
  • Gargi Sanati

Abstract

Against the backdrop of financial liberalisation, this paper examines India’s financial integration, both on the domestic and international fronts. Preliminary analysis of the secondary data shows India’s capital market grew significantly during 2001-2007 in terms of the trading value of equities and bonds compared to some sample countries, covering both developed (Germany, Italy, US, UK) and emerging (China, Korea, Brazil) economies. Also, during this phase, empirical evidence reveals high liquidity in the Indian capital market. The increasing gross flow of capital across borders and increasing correlation among different asset returns of major financial markets in the last couple of years provide the premise of interlinkage across different segments of financial markets, domestic as well as international. [Working Paper No. 431]

Suggested Citation

  • Gargi Sanati, 2010. "Integration of India’s Financial Markets on the Domestic and International Fronts: An Emperical Analysis of the Post-Liberalisation Period. June 2010," Working Papers id:3097, eSocialSciences.
    • Handle: RePEc:ess:wpaper:id:3097
    Note: Institutional Papers
    as

    Download full text from publisher

    File URL: http://www.esocialsciences.org/Download/repecDownload.aspx?fname=Document129102010440.94302.pdf&fcategory=Articles&AId=3097&fref=repec
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Gozzi, Juan Carlos & Levine, Ross & Schmukler, Sergio L., 2010. "Patterns of international capital raisings," Journal of International Economics, Elsevier, vol. 80(1), pages 45-57, January.
    2. Baxter, Marianne & Crucini, Mario J, 1995. "Business Cycles and the Asset Structure of Foreign Trade," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 36(4), pages 821-854, November.
    3. Gerard, Bruno & Thanyalakpark, Kessara & Batten, Jonathan A., 2003. "Are the East Asian markets integrated? Evidence from the ICAPM," Journal of Economics and Business, Elsevier, vol. 55(5-6), pages 585-607.
    4. Arvind Virmani, 2009. "Macro-economic management of the Indian economy: capital flows, interest rates, and inflation," Macroeconomics and Finance in Emerging Market Economies, Taylor & Francis Journals, vol. 2(2), pages 189-214.
    5. Philippe Aghion & Abhijit Banerjee & Thomas Piketty, 1999. "Dualism and Macroeconomic Volatility," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(4), pages 1359-1397.
    6. Philip R. Lane & Sergio L. Schmukler, 2006. "The international financial integration of China and India," Proceedings, Federal Reserve Bank of San Francisco, issue Jun.
    7. Gian Maria Milesi-Ferretti, & Philip R. Lane, 2003. "International Financial Integration," The Institute for International Integration Studies Discussion Paper Series iiisdp03, IIIS.
    8. Dickey, David A & Fuller, Wayne A, 1981. "Likelihood Ratio Statistics for Autoregressive Time Series with a Unit Root," Econometrica, Econometric Society, vol. 49(4), pages 1057-1072, June.
    9. Ross Levine & Norman Loayza & Thorsten Beck, 2002. "Financial Intermediation and Growth: Causality and Causes," Central Banking, Analysis, and Economic Policies Book Series, in: Leonardo Hernández & Klaus Schmidt-Hebbel & Norman Loayza (Series Editor) & Klaus Schmidt-Hebbel (Se (ed.),Banking, Financial Integration, and International Crises, edition 1, volume 3, chapter 2, pages 031-084, Central Bank of Chile.
    10. Alan M. Taylor, 1994. "Domestic Saving and International Capital Flows Reconsidered," NBER Working Papers 4892, National Bureau of Economic Research, Inc.
    11. Feldstein, Martin & Horioka, Charles, 1980. "Domestic Saving and International Capital Flows," Economic Journal, Royal Economic Society, vol. 90(358), pages 314-329, June.
    12. de Brouwer,Gordon, 1999. "Financial Integration in East Asia," Cambridge Books, Cambridge University Press, number 9780521651486, Enero-Abr.
    13. Caballero, Ricardo J. & Krishnamurthy, Arvind, 2001. "International and domestic collateral constraints in a model of emerging market crises," Journal of Monetary Economics, Elsevier, vol. 48(3), pages 513-548, December.
    14. Abramovitz, Moses, 1986. "Catching Up, Forging Ahead, and Falling Behind," The Journal of Economic History, Cambridge University Press, vol. 46(2), pages 385-406, June.
    15. Flint Brayton & Jaime R. Marquez, 1990. "The behavior of monetary sectors and monetary policy: evidence from multicountry models," Proceedings, Board of Governors of the Federal Reserve System (U.S.), pages 365-398.
    16. International Monetary Fund, 1990. "Capital Mobility in Developing Countries: M386Some Empirical Tests," IMF Working Papers 1990/117, International Monetary Fund.
    17. Hrushikesh Mallick, 2008. "Do remittances impact the economy? Some empirical evidences from a developing economy," Centre for Development Studies, Trivendrum Working Papers 407, Centre for Development Studies, Trivendrum, India.
    18. Martin Feldstein, 1991. "Domestic Saving and International Capital Movements in the Long Run and the Short Run," NBER Chapters, in: International Volatility and Economic Growth: The First Ten Years of The International Seminar on Macroeconomics, pages 331-353, National Bureau of Economic Research, Inc.
    19. John B. Taylor, 1995. "The Monetary Transmission Mechanism: An Empirical Framework," Journal of Economic Perspectives, American Economic Association, vol. 9(4), pages 11-26, Fall.
    20. Imad Moosa & Razzaque Bhatti, 1997. "Are Asian Markets Integrated? Evidence for Six Countries Vis-A-Vis Japan," International Economic Journal, Taylor & Francis Journals, vol. 11(1), pages 51-67.
    21. Rakesh Mohan, 2005. "Globalisation, financial markets and the operation of monetary policy in India," BIS Papers chapters, in: Bank for International Settlements (ed.), Globalisation and monetary policy in emerging markets, volume 23, pages 161-70, Bank for International Settlements.
    22. William F. Sharpe, 1964. "Capital Asset Prices: A Theory Of Market Equilibrium Under Conditions Of Risk," Journal of Finance, American Finance Association, vol. 19(3), pages 425-442, September.
    23. Lieven Baele, 2004. "Measuring European Financial Integration," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 20(4), pages 509-530, Winter.
    24. Surbhi Jain & N.R. Bhanumurthy, 2005. "Financial markets integration in India," Asia-Pacific Development Journal, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), vol. 12(2), pages 15-32, December.
    25. Palle Andersen & Ramon Moreno, 2005. "Financial integration: an overview," BIS Papers chapters, in: Bank for International Settlements (ed.), Globalisation and monetary policy in emerging markets, volume 23, pages 1-8, Bank for International Settlements.
    26. Cochrane, John H, 1991. "A Simple Test of Consumption Insurance," Journal of Political Economy, University of Chicago Press, vol. 99(5), pages 957-976, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Vijay Korra, 2011. "Short Duration Migration in India: An Appraisal from Census 2001," Working Papers id:3932, eSocialSciences.
    2. Adejare Yusuff Aremu & Shahzad Arfan, 2023. "Factors Influencing the Usage of E-Business to Improve SME Performance," International Journal of E-Business Research (IJEBR), IGI Global, vol. 19(1), pages 1-16, January.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kose, M. Ayhan & Prasad, Eswar S. & Terrones, Marco E., 2006. "How do trade and financial integration affect the relationship between growth and volatility?," Journal of International Economics, Elsevier, vol. 69(1), pages 176-202, June.
    2. Maurice Obstfeld, 1993. "International Capital Mobility in the 1990s," NBER Working Papers 4534, National Bureau of Economic Research, Inc.
    3. Balli, Faruk & Sorensen, Bent E., 2007. "Risk Sharing among OECD and EU Countries: The Role of Capital Gains, Capital Income, Transfers, and Saving," MPRA Paper 10223, University Library of Munich, Germany.
    4. Már Gudmundsson, 2008. "Financial globalisation: key trends and implications for the transmission mechanism of monetary policy," BIS Papers chapters, in: Bank for International Settlements (ed.), Financial market developments and their implications for monetary policy, volume 39, pages 7-29, Bank for International Settlements.
    5. Eozenou, Patrick, 2008. "Financial Integration and Macroeconomic Volatility: Does Financial Development Matter?," MPRA Paper 12738, University Library of Munich, Germany.
    6. Qayyum, Abdul & Mohsin, H, 2005. "The Integration of Financial Markets: Empirical Evidence from South Asian Countries," MPRA Paper 2364, University Library of Munich, Germany, revised 2005.
    7. Tesar, Linda L., 1995. "Evaluating the gains from international risksharing," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 42(1), pages 95-143, June.
    8. Ma, Guonan & McCauley, Robert N., 2013. "Is China or India more financially open?," Journal of International Money and Finance, Elsevier, vol. 39(C), pages 6-27.
    9. Faruk Balli & Bent E. Sørensen, 2006. "The Impact of the EMU on Channels of Risk Sharing between Member Countries," Papers of the Annual IUE-SUNY Cortland Conference in Economics, in: Oguz Esen & Ayla Ogus (ed.), Proceedings of the Conference on Human and Economic Resources, pages 399-429, Izmir University of Economics.
    10. Oguz Esen & Ayla Ogus (ed.), 2006. "Proceedings of the International Conference on Human and Economic Resources," Proceedings of the IUE-SUNY Cortland Conference in Economics, Izmir University of Economics, number 2006.
    11. Stijn Claessens & M Ayhan Kose, 2018. "Frontiers of macrofinancial linkages," BIS Papers, Bank for International Settlements, number 95.
    12. Surbhi Jain & N.R. Bhanumurthy, 2005. "Financial markets integration in India," Asia-Pacific Development Journal, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), vol. 12(2), pages 15-32, December.
    13. Boubakri, Salem & Guillaumin, Cyriac, 2015. "Regional integration of the East Asian stock markets: An empirical assessment," Journal of International Money and Finance, Elsevier, vol. 57(C), pages 136-160.
    14. de Brouwer,Gordon, 1999. "Financial Integration in East Asia," Cambridge Books, Cambridge University Press, number 9780521651486, Enero-Abr.
    15. repec:zbw:bofrdp:1997_008 is not listed on IDEAS
    16. Sin-Yu Ho & N.M. Odhiambo, 2018. "Analysing the macroeconomic drivers of stock market development in the Philippines," Cogent Economics & Finance, Taylor & Francis Journals, vol. 6(1), pages 1451265-145, January.
    17. Mr. Marco Terrones & Mr. Eswar S Prasad & Mr. Ayhan Kose, 2003. "Financial Integration and Macroeconomic Volatility," IMF Working Papers 2003/050, International Monetary Fund.
    18. Ekrem ERDEM & Ahmet KOSEOGLU & Ali Gokhan YUCEL, 2016. "Testing the validity of the Feldstein-Horioka Puzzle: New evidence from structural breaks for Turkey," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania / Editura Economica, vol. 0(2(607), S), pages 17-26, Summer.
    19. Pagano, Marco & Jappelli, Tullio, 2008. "Financial Market Integration Under EMU," CEPR Discussion Papers 7091, C.E.P.R. Discussion Papers.
    20. Epstien, Gerald & Gintis, Herbert, 1989. "International Capital Markets and the Limits of National Economic Policy," WIDER Working Papers 295606, United Nations University, World Institute for Development Economic Research (UNU-WIDER).
    21. Joseph P. Byrne & Giorgio Fazio & Norbert Fiess, 2009. "The Global Side of the Investment‐Saving Puzzle," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 41(5), pages 1033-1040, August.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ess:wpaper:id:3097. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Padma Prakash (email available below). General contact details of provider: http://www.esocialsciences.org .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.