Do Financial Sector Policies Promote Innovative Activity in Developing Countries? Evidence from India
AbstractThis paper attempts to shed some light on the role of financial sector policies in generating new knowledge, drawing on the experience of one of the fastest growing and largest developing countries. Using relatively long time series data, the results in this paper indicate that interest rate restraints help generate knowledge in India’s economy. Other financial repressionist policies, in the form of high reserve and liquidity requirements as well as significant directed credit controls, appear to have a dampening effect on ideas production. The results lend some support to the argument that some form of financial sector reforms may help stimulate economic growth via increasing innovative activity.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 14495.
Date of creation: 2009
Date of revision:
financial sector policies; innovative activity; endogenous growth; India;
Find related papers by JEL classification:
- E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
- O53 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
- O16 - Economic Development, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
- E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
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