WHAT DRIVES INDIA’S FINANCIAL INTEGRATION?

Authors

Rakesh Padhan, Indian Institute of Technology Roorkee, India.Follow
K. P. Prabheesh, Indian Institute of Technology Roorkee, India.Follow

Document Type

Article

Abstract

We explore the determinants of Financial Integration (FI) in the Indian context from 1996Q2-2018Q4. Using a newly constructed quarterly financial integration index based on the stock of external assets and liabilities position and a range of econometric methodologies, we find that a structural factor (trade openness) and an institutional factor (institutional quality) drive financial integration in India. Our findings also show the importance of exchange rate volatility, global growth rate, and global interest rate in determining India’s financial integration. These findings have crucial implications in designing the policy framework for achieving higher financial integration in India.

Recommended Citation

Padhan, Rakesh and Prabheesh, K. P. (2023) "WHAT DRIVES INDIA’S FINANCIAL INTEGRATION?," Bulletin of Monetary Economics and Banking: Vol. 26: No. 0, Article 5.
DOI: https://doi.org/10.59091/1410-8046.2057
Available at: https://bulletin.bmeb-bi.org/bmeb/vol26/iss0/5

First Page

77

Last Page

96

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License

Country

India

Affiliation

Indian Institute of Technology Roorkee