Foreign direct investment has become a major source of financing growth in India. Through this pa... more Foreign direct investment has become a major source of financing growth in India. Through this paper we make an attempt to investigate macroeconomic determinants of the foreign direct investment in India for the period 1991 to 2014. The two set of variable named nominal determinants and real determinants are transformed into models. However in order to have a deeper look, two composite indices are made with the help of Principal Component Analysis (PCA), as it avoids the problem of multicollinearity. The paper concludes that real factors are more significant but and their impact is also more because the value of coefficient is large. However, nominal factors are less significant and their impact on FDI inflow is also smaller as the value of their coefficients is smaller. In general, if real factors increase by 1% then FDI increases by 7 per cent, approximately. Similarly, if financial factors increase by 1%, FDI increases by 2 per cent, approximately. This implies that policy makers...
Asia-Pacific Journal of Management Research and Innovation
One of the prominent views is that development in a stock market has a positive impact on economi... more One of the prominent views is that development in a stock market has a positive impact on economic growth. The role of the stock market becomes important as it leads to capital formation in an economy which is used for producing goods and services in it, leading to growth in the real sector. However, it is only possible if the stock market is efficient enough to mobilise saving from a deficit spender unit to a surplus spender unit. Therefore, our study proposes to estimate the determinant of stock efficiency with the help of a fully modified ordinary least-squares model. The result of the analysis indicates that although both the risk-free interest rate and market capitalisation have a positive and significant impact on stock return, the impact of market capitalisation is larger. In terms of dynamic analysis, the error correction model shows that the speed of adjustment is around 50 per cent or time taken for re-establishing the long-run equilibrium is about two years. As market cap...
Foreign direct investment has become a major source of financing growth in India. Through this pa... more Foreign direct investment has become a major source of financing growth in India. Through this paper we make an attempt to investigate macroeconomic determinants of the foreign direct investment in India for the period 1991 to 2014. The two set of variable named nominal determinants and real determinants are transformed into models. However in order to have a deeper look, two composite indices are made with the help of Principal Component Analysis (PCA), as it avoids the problem of multicollinearity. The paper concludes that real factors are more significant but and their impact is also more because the value of coefficient is large. However, nominal factors are less significant and their impact on FDI inflow is also smaller as the value of their coefficients is smaller. In general, if real factors increase by 1% then FDI increases by 7 per cent, approximately. Similarly, if financial factors increase by 1%, FDI increases by 2 per cent, approximately. This implies that policy makers...
Asia-Pacific Journal of Management Research and Innovation
One of the prominent views is that development in a stock market has a positive impact on economi... more One of the prominent views is that development in a stock market has a positive impact on economic growth. The role of the stock market becomes important as it leads to capital formation in an economy which is used for producing goods and services in it, leading to growth in the real sector. However, it is only possible if the stock market is efficient enough to mobilise saving from a deficit spender unit to a surplus spender unit. Therefore, our study proposes to estimate the determinant of stock efficiency with the help of a fully modified ordinary least-squares model. The result of the analysis indicates that although both the risk-free interest rate and market capitalisation have a positive and significant impact on stock return, the impact of market capitalisation is larger. In terms of dynamic analysis, the error correction model shows that the speed of adjustment is around 50 per cent or time taken for re-establishing the long-run equilibrium is about two years. As market cap...
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Papers by Neha Nainwal