Examining the Effect of Foreign Direct Investment and Exports on Stock Market Performance: Evidence from India Based Bound Testing to Cointegration ARDL Approach

Sajida Parveen, Abida Hanif, Dr. Saif Ur Rahman and Dr. Salman Masood Sheikh
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Sajida Parveen: Research scholar of Economics and Commerce, The Superior University, Lahore, Pakistan
Abida Hanif: Research scholar of Economics, Govt. College University, Lahore, Pakistan
Dr. Saif Ur Rahman: Associate Professor, Faculty of Economics and Commerce, The Superior University, Lahore, Pakistan
Dr. Salman Masood Sheikh: Dean and Professor, Department of Economics and Commerce, The Superior University, Lahore, Pakistan

Bulletin of Business and Economics (BBE), 2023, vol. 12, issue 4, 700-707

Abstract: This article looks at the major macroeconomic factors that affect the performance of the Indian stock market including exports industrial value added money supply (M2) inflation and foreign direct investment. Statistical dynamics both short- and long-term have been determined using the unit root test co-integration test and autoregressive distributed lag (ARDL) using yearly time series data (1988 to 2022). The study's conclusions establish co-integration which is indicative of a long-term relationship between macroeconomic variables and the performance of the Indian stock market. The ARDL attests to the substantial and favorable effects that exports industrial value addition and foreign direct investment have on market capitalization. The importance of macroeconomic factors on a developing economy's stock market performance is emphasized in this study. This aids in providing these economies' policy makers with a set of guidelines.

Keywords: India; Stock markets; Time series analysis; performance; cointegration; ARDL (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:rfh:bbejor:v:12:y:2023:i:4:p:700-707

DOI: 10.61506/01.00293

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