Long-Run and Short-Run Relationship between Indian Stock Prices and Foreign Direct Investments (FDI) Equity Inflows

Authors

  • Bhuvaneshwari. D Ph.D Research Scholar, Avinashilingam School of Management Technology, Avinashilingam Institute for Home Science and Higher Education for Women, Coimbatore
  • K. Ramya Assistant Professor (SS), Avinashilingam School of Management Technology, Avinashilingam Institute for Home Science and Higher Education for Women, Coimbatore

DOI:

https://doi.org/10.53983/ijmds.v6i4.275

Keywords:

Stock Prices, FDI Equity Inflows, Augmented Dickey-Fuller Unit Root Test, Pearson Correlation Test, Johansen Cointegration Test, Granger Causality Test

Abstract

The present study is an attempt to find the cointegration and causality among Indian stock prices and Foreign Direct Investment (FDI) equity inflows to India. The CNX Nifty stock prices and FDI equity inflows from April 2011 to March 2016 are considered as sample data for this study. In this research, Augmented Dickey-Fuller unit root test, Pearson’s correlation test, Johansen’s cointegration test and Granger causality test are applied to analyse the stationarity, relationship, cointegration and causality between stock prices and FDI equity inflows respectively. From the analysis, it is concluded that there exist significant positive correlation and long-run equilibrium relationship between the time series data and it is further inferred that changes in Indian stock prices are found to lead the changes in FDI equity inflows to India in the short-run period.

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Published

30-04-2017

How to Cite

Bhuvaneshwari. D, and K. Ramya. “Long-Run and Short-Run Relationship Between Indian Stock Prices and Foreign Direct Investments (FDI) Equity Inflows”. International Journal of Management and Development Studies, vol. 6, no. 4, Apr. 2017, pp. 44-49, doi:10.53983/ijmds.v6i4.275.

Issue

Vol. 6 No. 4 (2017): IJMDS

Section

Articles