Determinants of Mutual Fund Flows in the Indian Stock Market: Insights Through the Nonlinear Autoregressive Distributed Lag Bounds-testing Approach with Structural Breaks

Madhu Kumari and Prallad Debnath

Vision, 2026, vol. 30, issue 3, 306-318

Abstract: The study investigates the determinants of mutual fund (MF) flows with special reference to the Indian stock market using monthly data over the period of January 2012 to December 2020. The analysis has been conducted using the linear and nonlinear autoregressive distributed lag bounds testing approach. The impact of structural breaks on the model has been incorporated by using dummies. The results reveal that the negative and positive changes in stock returns and volatility have asymmetric impact on fund flows by MFs. Macroeconomic variables have a significant impact on the investment decisions made by MFs. The trading patterns of MFs and foreign institutional investors (FIIs) are opposite to each other, that is, purchases by FIIs lead to sales by MFs and vice- versa. The trading pattern of FIIs significantly impacts the direction of MF flows.

Keywords: ARDL; Asymmetry Multipliers; Efficient Market Hypothesis; FIIS; Mutual Fund Flows; NARDL; Stock Market; Structural Break (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:sae:vision:v:30:y:2026:i:3:p:306-318

DOI: 10.1177/09722629221096805

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