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Financial access of unbanked villages in India from 1951 to 2019: ASpatial Approach

Author

Listed:
  • Sandhya Garg
  • Samarth Gupta

    (Institute of Economic Growth, Delhi)

Abstract

With the increased globalization, the production processes are fragmented and the size of the firm tends to shrink under more competitive environment all over the world. Intuitively, it is assumed that small firms face much competition than the larger one that could raise innovation and receive less external finance for the same. They together seem to be suggesting a positive relationship between size and innovation. The present study intends to investigate this issue based on the World Bank Enterprise Survey data for 36 countries. It is observed that large firms are found to be more innovative compared to the smaller ones. Moreover, competition plays a positive role in innovation in all the size categories. On the other hand, except bank finance, none of the external sources of finance has significantly contributed to the firm innovation effort. It is also noteworthy to mention that the non-institutional finance, which is supposed to be a potential source of finance for small firms, is so meagre to play a significant role in the innovation process of those firms.

Suggested Citation

  • Sandhya Garg & Samarth Gupta, 2020. "Financial access of unbanked villages in India from 1951 to 2019: ASpatial Approach," IEG Working Papers 403, Institute of Economic Growth.
    • Handle: RePEc:awe:wpaper:403
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    References listed on IDEAS

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    More about this item

    Keywords

    Financial Access; Banking; Spatial Distribution; Branch Expansion;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation
    • O25 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Industrial Policy
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R15 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Econometric and Input-Output Models; Other Methods

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