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Are Emerging Stock Markets Sideshows? Some Stylised Facts from an Emerging Economy, India

Author

Listed:
  • Saumitra N. Bhaduri

    (Saumitra N. Bhaduri, Associate Professor, Madras School of Economics, Gandhi Mandapam Road, Chennai 600 025 (India). E-mail: saumitra@mse.ac.in)

  • Bhargavi Shankar

    (Bhargavi Shankar, Madras School of Economics, Gandhi Mandapam Road, Chennai 600 025 (India).)

Abstract

The article addresses one of the most important policy questions: what role do emerging stock markets play in influencing real decisions such as corporate private investment? In this article we present some stylised facts about the relationship between the stock market and corporate investment through a case study of an emerging economy, India. The results indicate that the Indian stock market seems to be a sideshow in providing price signals to Indian managers and investment decisions are predominantly determined by a firm's fundamentals. However, stock plays a very important role as a source of finance for the Indian firms.

Suggested Citation

  • Saumitra N. Bhaduri & Bhargavi Shankar, 2007. "Are Emerging Stock Markets Sideshows? Some Stylised Facts from an Emerging Economy, India," Journal of Emerging Market Finance, Institute for Financial Management and Research, vol. 6(3), pages 229-248, December.
    • Handle: RePEc:sae:emffin:v:6:y:2007:i:3:p:229-248
    DOI: 10.1177/097265270700600301
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    JEL Classification: G32; Investment; financial liberalisation; emerging markets; business cycles;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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