FDI and Asian Capital Market: A Study of Selected Economies of Asia

Abstract

 Foreign Direct investment in any country plays a vital role for its overall development be it infrastructure, technology acquisition, employment generation or Mobilization of foreign exchange resources. Specially, the Asian economies has witnessed a substantial influx of foreign direct investment in recent decade. Favorable policies introduced by the government of the Asian countries has attracted the inflow of capital in these countries. Its beyond doubt that the flow of FDI has contributed to the growth of the GDP of these countries but the simultaneous study of its impact on share market of these countries will present a clear portrayal of its role in the economies of these region. This paper will attempt to study the implication of FDI in the Stock market of selected economies of Asia. The research evaluated 10 years data to study the relation between the stock market and FDI using the various statistical tools like correlation and Regression analysis. The analysis reveals that the FDI has direct impact on both the stock market of most of the Asian countries.