Investigation of Foreign Institutional Investors (FIIs) in India

Gunjan Batra (), Nithiyananthan Suppiah, Pamila Dembla and Nand Kumar
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Gunjan Batra: Department of Information Systems and Security, Kennesaw State University, Georgia, USA
Nithiyananthan Suppiah: Department of Information Systems and Security, Kennesaw State University, Georgia, USA
Pamila Dembla: Department of Information Systems and Security, Kennesaw State University, Georgia, USA
Nand Kumar: Department of Humanities, Delhi Technological University, Delhi, India

Journal of Internet Banking and Commerce, 2023, vol. 28, issue 04, 01-12

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.

Keywords: Foreign Institutional Investment; FII; Determinants; Indian economy (search for similar items in EconPapers)
JEL-codes: A11 (search for similar items in EconPapers)
Date: 2023
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