Financial Development and Growth in India: A Growing Tiger in a Cage?
Abstract
This paper examines the efficiency of the different segments of India's financial system using firm-level data on corporate financing patterns. Firms are increasingly relying on external funds to finance their investment in most recent years. Empirical analyses indicate that (1) the financial system in India is not channeling funds into industries with higher external finance dependence; (2) the debt financing system does not allocate funds according to firms' external finance dependence, while equity financing system does; and (3) firms in an industry that are more dependent on external finance grow more slowly.Download Info
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Paper provided by International Monetary Fund in its series IMF Working Papers with number 08/79.Length: 76
Date of creation: 01 Mar 2008
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Handle: RePEc:imf:imfwpa:08/79
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Related research
Keywords: Financial systems; Corporate sector; Economic growth; Debt management;This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-05-10 (All new papers)
- NEP-CWA-2008-05-10 (Central & Western Asia)
- NEP-DEV-2008-05-10 (Development)
- NEP-FDG-2008-05-10 (Financial Development & Growth)
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Citations
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.Cited by:
- Jahangir Aziz, 2008. "Deconstructing China’s and India’s Growth: The Role of Financial Policies," Working Papers id:1714, eSocialSciences.
- Jahangir Aziz, 2008. "Deconstructing China’s and India’s Growth - The Role of Financial Policies," Macroeconomics Working Papers 22142, East Asian Bureau of Economic Research.
- C Niranjan Rao, 2008. "The Role of Intellectual Property Rights in Information and Communication Technologies," Working Papers id:1742, eSocialSciences.
- Jahangir Aziz, 2008. "Real and Financial Sector Linkages in China and India," IMF Working Papers 08/95, International Monetary Fund.
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