Determinants of foreign institutional investments in India (2000-2017): a panel data approach

摘要

India as a key emerging market that has been attracting a huge but nonlinear amount of investments from FIIs, which has been affecting the Indian economy's potential to grow. The financial inflows and outflow of capital substantially influence the capital markets and GDP growth of the country. Thus, it is required to understand the determinants that influence the foreign institutional investors capital flows to India which in turn affects the country's road to sustainable development. The main objective of the current research is to examine the determinants of foreign institutional investments in India for which panel data is collected from 2000 to 2017. The study revealed that in the short run, FIIs behaviour has not been affected by the financial market development, return on investment and political risks faced by the country as FIIs are more focused towards reaping the fruits of long-term development of Indian economy.