Foreign Institutional Investors And Security Returns: Evidence From Indian Stock Exchanges

One of the outstanding features of globalization in the financial services industry is the increased access provided to non-local investors in several major stock markets of the world. Increasingly, stock markets from emerging markets permit institutional investors to trade in their domestic markets. This opening up of capital markets in emerging market countries has been perceived as beneficial by some researchers while others are concerned about possible adverse consequences such as contagion. In this paper, the authors address the issues in the context of foreign institutional investors' (FII) trading activities in a big emerging market.