Jul 2026· International Journal For Multidisciplinary Research· Vol 8· 0 citations· 17 references
Abstract
Foreign Portfolio Investment (FPI) plays a vital role in deepening financial markets, enhancing liquidity, and integrating emerging economies like India into the global capital system. Unlike Foreign Direct Investment (FDI), FPI involves short-term, non-controlling investments in equities, bonds, and hybrid instruments, making it sensitive to global economic, financial, and political conditions. This study examines the determinants of Net FPI inflows into India across pre-COVID (April 2012–March 2020) and post-COVID (April 2021–March 2025) periods, highlighting shifts in investor behavior and market dynamics.
Using monthly data from RBI, NSDL, NSE, MOSPI, Bloomberg, and S&P Dow Jones, the study applies the Augmented Dickey-Fuller (ADF) test for stationarity and the Autoregressive Distributed Lag (ARDL) model to analyze short-run relationships between Net FPI and key domestic and global factors, including inflation (CPI), industrial production (IIP), broad money supply (M3), stock market performance (Nifty 50 and S&P 500 growth), exchange rate (INR/USD), market volatility (NSE VIX and USA VIX), and the Global Economic Policy Uncertainty (GEPU) index.
Results indicate that pre-COVID inflows were influenced by past FPI trends, domestic inflation, exchange rate movements, stock market returns, and global policy uncertainty, while industrial production and S&P 500 returns had counter-cyclical effects. Post-COVID, determinants shifted toward domestic growth fundamentals, currency movements, and global uncertainty, with inflation and volatility losing significance. Global market performance, particularly the S&P 500, consistently showed a substitution effect. Diagnostic tests confirm model stability, and R-squared values indicate strong explanatory power.
The study suggests that post-COVID, foreign investors prioritize growth fundamentals and global risk over short-term domestic fluctuations. For policymakers, this underscores the importance of macroeconomic stability, clear communication, and effective risk management to attract and sustain FPI. By integrating long-term monthly data with advanced econometric techniques, the research provides actionable insights for portfolio managers, regulators, and corporate strategists navigating India’s dynamic investment landscape.
The present paper aims to investigate the relationship between non-performing assets (NPAs) and profitability in Indian commercial banks. Focusing on the major economic disruptions, namely, the global financial crisis, demonetization and the COVID-19 pandemic, it examines their role in structurally reshaping the NPA-profitability nexus.
Our dataset comprised a balanced panel of 30 public and private sector commercial banks in India covering the period from 2004 to 2024. We applied Bai–Perron multiple breakpoint tests and Chow tests to identify regime shifts. Static panel regressions with Heteroskedasticity and Autocorrelation Consistent-corrected ordinary least squares and dynamic system generalized method of moments (GMM) estimations are employed to address heteroskedasticity, autocorrelation and endogeneity. The model incorporates bank-specific factors, market concentration indicators, macroeconomic variables and an interaction term between inflation and broad money (BM).
The findings reveal multiple statistically significant structural breaks corresponding to major economic shocks. NPAs consistently exert a significant negative impact on profitability across all regimes, while bank size positively influences return on assets, particularly during crisis periods. Market concentration yields mixed and regime-dependent effects. The interaction between inflation and BM significantly moderates profitability during transitional phases, highlighting the role of inflation-adjusted liquidity conditions in shaping bank performance.
The findings suggest that bank managers should strengthen credit risk monitoring and adopt proactive asset quality management, especially during periods of inflationary liquidity expansion. The policymakers and regulators can benefit from implementing countercyclical capital buffers and dynamic stress-testing frameworks tailored to structural shocks. However, our results should be interpreted with caution as we excluded foreign banks from our dataset and focused solely on Indian commercial banks, which may limit cross-country generalizability. Future research could extend the framework to comparative emerging-market settings.
To the best of our knowledge, this study is the first attempt to integrate structural break analysis with dynamic GMM estimation and to introduce inflation-adjusted liquidity as a moderating mechanism in the NPA-profitability relationship in an emerging economy context.
Faiza Rehman, Mohammad Ammar Ahsan, S. Akhtar et al.· Journal of Financial Regulat...· 0 citations
This study examines the impact of Foreign Institutional Investors (FIIs), also referred to as Foreign Portfolio Investors (FPIs), on the growth, liquidity, and trading performance of the Indian capital market over the period 2015–2025. The primary objective is to assess whether foreign institutional investment contributes to market development and efficiency or leads to changes in market dynamics. Using secondary data collected from reliable financial and regulatory sources, the study evaluates the relationship between FII/FPI investment flows and key indicators of capital market performance. The empirical analysis is based on three widely recognized market indicators: the Market Capitalization Ratio (MCR), which measures the size of the capital market relative to Gross Domestic Product (GDP); the Turnover Ratio (TR), which reflects market liquidity and trading efficiency; and the Value Traded Ratio (VTR), which assesses trading activity in relation to the overall economy. To obtain accurate and meaningful results, the study applies the Augmented Dickey–Fuller (ADF) test to verify the stability of the time-series data and uses the Pairwise Granger Causality test to identify the direction of influence between FII/FPI investment flows and the selected indicators of the Indian capital market. The findings provide evidence on the extent to which foreign institutional investment influences market liquidity, trading activity, and overall market development. The study contributes to the understanding of the role of FIIs/FPIs in the Indian capital market and offers useful insights for policymakers, regulators, investors, and researchers in designing strategies that promote sustainable market growth while maintaining financial stability.
Mamta Singh· International Journal of Inn...· 0 citations
This study examines the trends and behavior of Foreign Portfolio Investment (FPI) in India's equity and debt markets during the period from 2015 to 2025. Foreign portfolio investment serves as an important source of capital for emerging economies and plays a significant role in influencing market liquidity, investment activity, and overall financial market performance. The research focuses on understanding the factors that drive FPI movements and evaluating their implications for India's financial system. The study investigates the influence of both domestic and international macroeconomic conditions on foreign investment decisions. During the selected period, global financial markets experienced considerable uncertainty due to various economic and political developments. Events such as the COVID-19 pandemic, geopolitical conflicts, changing investor sentiment, and shifts in monetary policies by major central banks had a substantial impact on the direction and volume of portfolio investments. These factors contributed to significant variations in FPI inflows and outflows across India's capital markets. The research analyzes the relationship between FPI trends and key economic indicators, including interest rates, exchange rate fluctuations, and market capitalization. The findings reveal that foreign investment flows are highly responsive to changes in economic conditions and market expectations. The study also identifies important patterns in investment behavior and highlights the sensitivity of portfolio capital to both global and domestic developments. Overall, the research provides valuable insights into the dynamics of FPI and its role in shaping the performance and stability of India's financial markets.
Mamta Singh· Journal of Commerce, Economi...· 0 citations
This study examines whether the relationship between foreign derivative investment (FDerI) and financial growth of firms listed on the Nairobi Securities Exchange (NSE) is asymmetric — that is, whether positive shocks (increases) and negative shocks (decreases) in FDerI exert differential and non-linear effects on net profit growth. Conventional symmetric models mask this heterogeneity; the Nonlinear Autoregressive Distributed Lag (NARDL) framework is uniquely suited to detect it. Using an unbalanced panel of 40 NSE-listed firms over 2019–2024 (N = 240 firm-year observations), the study decomposes FDerI into its positive partial sums (FDerI+) and negative partial sums (FDerI−), constructs the NARDL model alongside control variables (firm leverage, liquidity, and size), and applies panel-NARDL bounds testing, Wald asymmetry tests, and cumulative dynamic multiplier analysis. Prior to estimation, data undergo pooled winsorisation, Levin-Lin-Chu unit root tests confirming stationarity, and Driscoll-Kraay standard error correction for cross-sectional dependence and serial correlation. The bounds test confirms a long-run cointegrating relationship between FDerI and financial growth. A significant asymmetry is detected: positive FDerI shocks have a statistically negligible effect on financial growth (β+ ≈ 0.012, p > 0.05), while negative shocks derivative withdrawals or contractions exert a significant negative impact (β− = −0.187, p < 0.01). The Wald test rejects symmetry (F = 8.43, p < 0.01). Dynamic multipliers reveal an asymmetric adjustment path: negative shocks propagate to financial growth more rapidly and persistently than positive shocks, with full adjustment achieved after approximately four quarters. The short-run error correction term is negative and significant (ECT = −0.312, p < 0.01), confirming reversion to long-run equilibrium. The dominant negative-shock channel suggests that derivative market contractions driven by regulation tightening, liquidity dry-up, or global risk-off episodes damage NSE firm growth more severely than derivative expansions benefit it. The CMA should prioritise market depth, liquidity buffers, and hedging cost reduction to prevent adverse derivative shocks. This is the first study to apply a panel-NARDL approach to the FDerI–financial growth nexus in a frontier African derivatives market, addressing the long-standing gap in symmetric modelling. The study introduces the concept of the "asymmetric hedging trap" where NSE-listed firms suffer disproportionately from derivative downturns relative to any gains from expansions. The study recommends that regulatory and corporate risk-management attention be redirected from encouraging derivative market expansion toward safeguarding firms against derivative contractions.
Joseph Kiplangat Serem, F. Nyarombe, C. Kurere· African Journal of Empirical...· 0 citations
Foreign Direct Investment (FDI) has emerged as one of the most significant sources of external capital for developing economies, providing not only financial resources but also technology, managerial expertise, and access to global markets. Since the initiation of economic liberalisation in 1991, India has progressively relaxed its FDI policy regime, and inflows have grown substantially over the past decade, aided by initiatives such as Make in India, the Production-Linked Incentive (PLI) scheme, and easing of sectoral caps. This paper examines the relationship between FDI inflows and economic growth in India using secondary time-series data for the period 2014-15 to 2023-24, drawing on statistics published by the Department for Promotion of Industry and Internal Trade (DPIIT), the Reserve Bank of India (RBI), and the Ministry of Statistics and Programme Implementation (MoSPI). Descriptive statistics, Pearson correlation, and simple linear regression are used to examine the strength and direction of association between annual FDI inflows and the real GDP growth rate. The results indicate that while FDI inflows have risen fairly consistently in absolute terms, the simple contemporaneous statistical association between annual FDI inflows and GDP growth over this period is weak and statistically insignificant, a finding that is consistent with a section of the existing literature which argues that the growth effects of FDI in India operate with a lag and are mediated by sectoral composition, absorptive capacity, and complementary domestic investment rather than through a simple linear year-on-year relationship. The study concludes with policy suggestions to strengthen the developmental impact of FDI in India.
H. Bullappa· EPRA International Journal o...· 0 citations
This paper investigates the dynamic short- and long-run effects of four budget deficit financing modes—monetary financing (seigniorage), domestic borrowing, external borrowing, and taxation—on inflation across 50 African countries over 1995—2024. Using 1,500 country-year observations, we apply cross-sectionally augmented unit root tests, Westerlund panel cointegration tests, and the Pooled Mean Group (PMG), Mean Group (MG), and Common Correlated Effects Mean Group (CCEMG) estimators, with Driscoll—Kraay standard errors and system-GMM as robustness checks. Monetary financing is the dominant long-run inflationary driver: a one percentage point rise in the seigniorage-to-GDP ratio increases log inflation by 0.682 points (p < 0.01). The nominal exchange rate is a key transmission channel (coefficient: 0.385, p < 0.001), while tax revenues exert a robust disinflationary effect (−0.348, p < 0.01). Domestic borrowing generates moderate long-run inflationary pressure (0.214, p < 0.05), and external debt effects are contingent on the exchange rate regime. CFA franc zone membership reduces the seigniorage coefficient to an insignificant 0.163, versus 0.847 (p < 0.01) for non-CFA countries. Central bank in-dependence further attenuates the seigniorageinflation nexus. These findings have direct implications for fiscal-monetary coordination and central bank institutional design in Africa.
M. Mvuyekure, F. Nimubona, S. Diop et al.· International Journal of Sci...· 0 citations