Fii Flows to India: Nature and Causes

Money and Finance, Vol. 2, No. 7, October-December 2001

31 Pages Posted: 18 Jan 2005

Abstract

Since the beginning of liberalization FII flows to India have steadily grown in importance. In this paper we analyze these flows and their relationship with other economic variables and arrive at the following major conclusions:

* While the flows are highly correlated with equity returns in India, they are more likely to be the effect than the cause of these returns; * The FIIs do not seem to be at an informational disadvantage in India compared to the local investors; * The Asian Crisis marked a regime shift in the determinants of FII flows to India with the domestic equity returns becoming the sole driver of these flows since the crisis.

Keywords: FII, India, Asian crisis

JEL Classification: G15, N25

Suggested Citation

Chakrabarti, Rajesh, Fii Flows to India: Nature and Causes. Money and Finance, Vol. 2, No. 7, October-December 2001, Available at SSRN: https://ssrn.com/abstract=649852

Rajesh Chakrabarti (Contact Author)

O. P. Jindal Global University ( email )

Sonepat Narela road
Sonepat
Sonepat, Haryana 131001
India

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