Portfolio Flows Into India: Do Domestic Fundamentals Matter?
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Summary:
This paper analyzes the factors affecting portfolio equity flows into India using monthly data. Flows to India are small compared to other emerging markets, but seem to be relatively less volatile. They also seem to be quite resilient. The paper shows that portfolio flows are determined by both external and domestic factors. Among external factors, LIBOR and emerging market stock returns are important, while the primary domestic determinants are the lagged stock return and changes in credit ratings. In quantitative terms, both external and domestic factors are found to be about equally important.
Series:
Working Paper No. 2003/020
Subject:
Balance of payments Emerging and frontier financial markets Financial institutions Financial markets Financial services Interbank rates Portfolio investment Stock markets Stocks
English
Publication Date:
January 1, 2003
ISBN/ISSN:
9781451843866/1018-5941
Stock No:
WPIEA0202003
Pages:
37
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