AN EMPIRICAL STUDY TO MEASURE THE IMPACT OF FOREIGN DIRECT INVESTMENT (FDI) AND FOREIGN INSTITUTIONAL INVESTMENT (FII) ON CNX-NIFTY

Authors

  • Sapana Shaw

DOI:

#10.25215/1300991267.08

Abstract

Purpose of the study: After liberalization foreign direct investment (FDI) and foreign institutional investment (FII) was encouraged and over time these emerged as an instrument of the stock market. The growth of the Indian stock market depends on various factors. The main purpose of the present study is to examine the impact of FDI and FII on the Indian stock market (CNX- NIFTY). Methodology used: In the present study Annual average Stock market index (CNX-NIFTY) is taken as a dependent variable while FDI and FII are used as independent variables. The secondary data related to above mentioned three variables are collected for 20 years from 2002-03 to 2021-22. The selected data has been put into the Jarque-Bera test to check the normality while the Augmented Dickey fuller test is used to check the stationarity of data. Beyond this multiple regression is used to fulfil the objective of the study. Major findings: From the study, it is found that all three variables are normal according to the Jarque-bear test. The augmented dickey-fuller test showed that FII is stationary data at level and the other two variables are stationary at first difference. A good correlation is found between FII-CNX – Nifty from Pearson correlation although there was no problem of auto-correlation found between both from Durbin Watson Test. The model used in the study revealed that 92% of the variation in CNX –NIFTY can be explained through independent variables but FDI does not impact much on the performance of CNX – nifty.

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Published

2024-08-15

How to Cite

Sapana Shaw. (2024). AN EMPIRICAL STUDY TO MEASURE THE IMPACT OF FOREIGN DIRECT INVESTMENT (FDI) AND FOREIGN INSTITUTIONAL INVESTMENT (FII) ON CNX-NIFTY. Redshine Archive, 10(4). https://doi.org/10.25215/1300991267.08

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Articles