Influence of Foreign Institutional Investments (FIIs) on the Indian Stock Market: An Insight by VAR Models

摘要

The study examines the influence of foreign institutional investments (FIIs) on the Indian equity market and its role in integration with the United States (US) equity market. Different vector autoregression (VAR) models have been employed for sub-periods created by the structural breaks. Despite global recessionary conditions, both purchase and sales of FIIs have steadily increased. The FII inflows and outflows are significantly influenced by the domestic equity market. The exchange rate has no effect on FII inflows; however, outflows are influenced by its change. The US equity market has no influence on Flls' inflows but has marginal impact on the outflows.