Business groups, financing constraints, and investment : the case of India
AbstractWe examine the effect of business group affiliation on corporate investment behavior in India. We use a data set containing 684 Indian listed companies for the 1989-1997 period. We estimate a simple investment equation and find evidence that cash flow has a positive effect on investment spending of stand-alone firms, whereas for group affiliates cash flow is either insignificant or has a much lower coefficient. This suggests that business group affiliates have better access to external funds than stand-alone firms.
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Bibliographic InfoPaper provided by University of Groningen, Research Institute SOM (Systems, Organisations and Management) in its series Research Report with number 02E02.
Date of creation: 2002
Date of revision:
Other versions of this item:
- Robert Lensink & Remco van der Molen & Shubashis Gangopadhyay, 2003. "Business groups, financing constraints and investment: the case of India," The Journal of Development Studies, Taylor and Francis Journals, vol. 40(2), pages 93-119.
- 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.
- NEP-ALL-2002-06-13 (All new papers)
- NEP-ENT-2002-04-03 (Entrepreneurship)
- NEP-MFD-2002-04-25 (Microfinance)
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