Perspectives of Foreign Trade subjected to financing by Foreign Financial Institutions (FFIs) using business practices models as derived by factor and cluster analysis Post RBI Road Map 2005

Ashok Edurkar () and Dr.Dattatrya G. Chougule

MPRA Paper from University Library of Munich, Germany

Abstract: With a reference to India’s foreign trade, the aim of this paper is to assess business practices models of 24 Foreign Financial Institutions (FFIs) operating in India post RBI Road Map 2005 and during the period 2003 to 2013. Business practices models have been evaluated by the application of factor analysis followed by cluster analysis. 23 variables related to working of foreign financial institutions supported with 5 variables related to India’s foreign trade, total 28 variables which were reduced into eight factors by using factor analysis. Using these eight factors, cluster analysis was carried out to group 24 foreign financial institutions into 3 clusters leading to three distinct business practices models which are applied by FFIs for financing of domestic as well as foreign trade . The dataset for analysis was for the period for financial years 2003-04 to 2012-13 and the focus is on post RBI Road Map-2005 for FFIs. This paper also aims to take a review of FFIs operating in India based on two major hypothesis. For this research study, 24 FFIs operating in India consistently (as per “Profile of Banks” published by RBI), out of the universe consisting of 43 FFIs in India during year 2003-13, are considered.

Keywords: Business Practices; Foreign Financial Institutions; Foreign Banks; Finance (search for similar items in EconPapers)
JEL-codes: G2 G21 G3 G30 (search for similar items in EconPapers)
Date: 2016-07-06, Revised 2016-08-31
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