Foreign Investment and its Coherent Relationship with Stock Market Returns A Cross Country Study
Journal Title: International Journal of Trend in Scientific Research and Development - Year 2020, Vol 4, Issue 2
Abstract
The research is aimed at finding relationship between two key indicators of identifying the health of any economy namely status of foreign investment and stock market returns. The stock exchange return may be indicated by both benchmark index and market cap. It has been observed that these two go hand in hand with almost perfectly positive correlation. Subsequently the relationship between FDI investment and benchmark stock exchange has been tested in the context of two economies India and Brazil, which are predominantly having strong potential to attract considerable amount of foreign investment. Vector autoregression model VAR has been used to identify the relationship followed by lag order selection and identification of lag length. The bidirectional causality has been tested followed by identifying the variables as block exogenous. Impulse and variance decomposition tests have proved the importance of shock of exogenous factors onto the variables. A detailed case study has been performed for India, where Cointegration test significantly concluded strong interdependence between FDI equity investment , ECB debt investment and benchmark stock index NIFTY 500 . The research has been concluded by developing a forecasting model for the benchmark index based on the values of FDI and its own values with first and second lag orders. Avik Ghosh | Suman Sourav ""Foreign Investment and its Coherent Relationship with Stock Market Returns: A Cross-Country Study"" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Volume-4 | Issue-2 , February 2020, URL: https://www.ijtsrd.com/papers/ijtsrd29965.pdf Paper Url : https://www.ijtsrd.com/economics/financial-economics/29965/foreign-investment-and-its-coherent-relationship-with-stock-market-returns-a-cross-country-study/avik-ghosh
Authors and Affiliations
Avik Ghosh | Suman Sourav
Keywords
Related Articles
- EP ID EP685916
- DOI -
- Views 324
- Downloads 0
Impact of Environmental Conservation Status on Indigenous Medicinal Knowledge (IMK) Survival: Case of South Imenti in Meru County
Survival of indigenous medicinal knowledge is threatened due to environmental degradation. The later is partly caused by loss of natural vegetation, land transformation and diminishing use of socio-cultural conservation...
Labour Incentives and Organisational Growth of Public Corporations in Rivers State
This study investigated labour incentives and organisatonal growth in Rivers State Public Corporation. The study adopted a descriptive survey and correlational design. The population of the study was 202 staff of Tide Ne...
Association of CD4 T cell Recovery and Interpersonal Trust in Patient Physician Relationship among HIV Infected Adults in Hospital for Tropical Diseases Vietnam
The global HIV AIDS pandemic is still dangerous due to high incidence and high mortality rate. There are many factors associated with the immunological response beside treatment with medical practice. This paper aimed to...
Durability Study of Concrete using Foundry Waste Sand
Due to ever increasing quantities of waste substances and industrial by products, strong waste management is the high concern in the world. Scarcity of land filling house and because of its ever growing cost, recycling a...
Analysis and Design of Shear Wall with Various Openings Criteria
œShear wall in a building construction, a rigid vertical diaphragm capable of transferring lateral forces from exterior wall , floors and roofs to the ground foundation in a direction parallel to their planes . Example,....