Business groups, financing constraints and investment: the case of India
AbstractWe examine the effect of business group affiliation on corporate investment behaviour in India. More specifically, we test whether group affiliation reduces financing constraints for the affiliated firms. We use a data set containing 694 listed Indian companies for the 1989-97 period. We estimate a simple investment equation and find evidence that the investment-cash flow sensitivity is much lower for group affiliates. This suggests that business group affiliates have better access to external funds than stand-alone firms.
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Bibliographic InfoArticle provided by Taylor & Francis Journals in its journal Journal of Development Studies.
Volume (Year): 40 (2003)
Issue (Month): 2 ()
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Other versions of this item:
- Gangopadhyay, Shubashis & Lensink, Robert & Molen, Remco van der, 2002. "Business groups, financing constraints, and investment : the case of India," Research Report 02E02, University of Groningen, Research Institute SOM (Systems, Organisations and Management).
- Gangopadhyay, Shubashis & Lensink, Robert & Molen, Remco van der, 2001. "Business groups, financing constraints, and investment: the case of India," CCSO Working Papers 200116, University of Groningen, CCSO Centre for Economic Research.
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