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ARDL Bound Test Approach for the State of Economy: A Study of the Indian Scenario (During and Post-COVID Era)

Kirti Khanna ^a

Vikas Sharma ^b

Munish Gupta ^b

^{^a}Manav Rachna International Institute of Research & Studies, India

^{^b}Chandigarh University, India

Finance Analytics in Business

ISBN: 978-1-83753-573-6, eISBN: 978-1-83753-572-9

Publication date: 17 June 2024

Abstract

Introduction

COVID-19 has been the subject of a number of inquiries recently. All country's capital market practices have been affected by the COVID-19 outbreak. Economic woes, along with the stock market crash, have hit emerging markets and developing economies in a variety of directions.

Purpose

This study is an attempt to focus on the Indian economy to provide the gist of the situation and recovery mode of an economy with the help of growth indicators of the economy.

Methodology

This study is based on secondary data. The researchers applied some econometric tools, viz, unit root test Augmented Dickey-Fuller (ADF), Panel Granger Causality, and Panel ARDL Bound Test were applied to examine the relationship of economic indicators and stock market benchmark in two periods: March 2020–June 2021 (during period) and July 2021 to March 2022 (post period).

Findings

The findings of this study explored the different causal relationships for the selected variables in both periods. The study discussed the reasons for ARDL (Auto Regressive Distributed Lag) bound for all selected factors. The study revealed the story of crude oil prices and Gold as trusted investment avenues during the crises.

Significance/Value

As we know, the capital market's backlash is reflected in movements in stock prices and stock exchange volume, which are concerned with the economic effects of the pandemic and urged the segment to react. Investors can use the information in the event to make investment decisions.

Keywords

Citation

Khanna, K., Sharma, V. and Gupta, M. (2024), "ARDL Bound Test Approach for the State of Economy: A Study of the Indian Scenario (During and Post-COVID Era)", Taneja, S., Kumar, P., Sood, K., Özen, E. and Grima, S. (Ed.) Finance Analytics in Business (Emerald Studies in Finance, Insurance, and Risk Management), Emerald Publishing Limited, Leeds, pp. 293-306. https://doi.org/10.1108/978-1-83753-572-920241015

Publisher

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Emerald Publishing Limited