THE EFFECT OF FOREIGN DIRECT INVESTMENT AND FOREIGN PORTFOLIO INVESTMENT ON STOCK MARKET RETURN IN SAARC COUNTRIES

Authors

  • Mirwais Khan MS Abasyn University, Peshawar, Pakistan
  • Shahid Rasheed PhD scholar Abasyn University, Peshawar, Pakistan
  • Hameed Ullah MS Abasyn University, Peshawar, Pakistan
  • Hayat Ullah Lecturer Jahan Institute of Higher Education, Kabul, Afghanistan
  • KaleemUllah Jan PhD scholar Abasyn University, Peshawar, Pakistan
  • Saddam Alam PhD scholar Abasyn University, Peshawar, Pakistan
  • Umer Qazi Assistant Professor Abasyn University, Peshawar, Pakistan
  • Mahboobullah Assistant Professor Abasyn University, Peshawar, Pakistan

Keywords:

Foreign direct investment, Foreign portfolio investment, Stock market returns, SAARC

Abstract

The purpose of this study is to examine the influence of foreign direct investment (FDI) and foreign portfolio investment (FPI) on stock market returns (SMR) in SAARC member nations between 2014 and 2019. The World Development Indicators (WDI) and the global economy provided secondary data for this study. Numerous punitive procedures, like the Shapiro-Wilk wtest for determining data normality and the Breusch-pagan test for determining heteroscedasticity, were utilised for robust data analysis. The findings reveal that all FDI and FPI had a low correlation with stock market returns; additionally, the low correlation indicates that the variables included in the current analysis did not exhibit multicollinearity. Diagnostic tests, including the Hausman test, revealed that the author should use the random effect model to analyse the data. The coefficient of FDI was shown to be negatively significant, meaning that increasing FDI reduces stock market returns. Growth in FPI, on the other hand, increased stock market returns. Additionally, the results suggested that the model as a whole is well-fitting.

References

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https://doi.org/10.1007/sl1135-012-9774-4

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Published

2022-12-31

How to Cite

Khan, M. ., Rasheed, S. ., Ullah, H. ., Ullah, H. ., Ullah Jan, K., Alam, S., Qazi, U. ., & Mahboobullah. (2022). THE EFFECT OF FOREIGN DIRECT INVESTMENT AND FOREIGN PORTFOLIO INVESTMENT ON STOCK MARKET RETURN IN SAARC COUNTRIES. The Journal of Contemporary Issues in Business and Government, 28(4), 691–702. Retrieved from https://cibgp.com/au/index.php/1323-6903/article/view/2511

Issue

Vol. 28 No. 4 (2022): The journal of contemporary issues in business and government

Section

Articles

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