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 505
- Downloads 0
Audio Signal Denoising Algorithm by Adaptive Block Thresholding using STFT
In this work performance comparison of Time-frequency algorithms is presented for removal of Additive White Gaussian Noise. For better time-frequency resolution properties & better adaptability of STFT, it is used in thi...
Survey of Detecting Heartbeats, Temperature and ECG of Human Body using IOT
In this paper, to presents an overview of the "SURVEY OF DETECTING HEARTBEATS, TEMPERATURE and ECG OF HUMAN BODY USING IOT". Smart health care means to monitor people' health outside the clinical settings. With the deve...
An Approach for Effectively Handling Small-Size Image Files in Hadoop
Small size file handling problem is a big challenge in Hadoop framework. Many approaches have been proposed and evaluated to deal with the small size file handling problem in Hadoop. File merging strategy is one of the m...
Kindness and Pedagogical Tact in the Teachers Courtesy
Pedagogical scholars argue that the teacher`s sympathy comes from the combination of the personality of those with extrovert or introvert characteristics. Azimova Nasiba Ergashovna | Nasimova Zarina Isomiddin Qizi "Kindn...
The Role of E Commerce in Improving Customer Satisfaction
The cut throat competition in E commerce has forced the companies to focus on providing customer satisfaction and gain customer loyalty. Thus, putting up long term customer relationships through customer satisfaction is...