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Liberalisation, the Stock Market and the Market for Corporate Control: A Bridge Too Far for the Indian Economy?

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  • Singh, A.

Abstract

An outstanding feature of the Indian economic reform in the recent period has been the fast expansion of stock markets and their growing role in the economy. The paper first reviews the stock market reforms and analyses the effects of stock market expansion on corporate growth and the real economy. Second, it examines the proposed next stage of the reforms: the establishment of a market for corporate control. The paper offers analyses and evidence to suggest that this reform is more likely to harm than help the real economy at India's present stage of development.

Suggested Citation

  • Singh, A., 1997. "Liberalisation, the Stock Market and the Market for Corporate Control: A Bridge Too Far for the Indian Economy?," Accounting and Finance Discussion Papers 97-af35, Faculty of Economics, University of Cambridge.
  • Handle: RePEc:cam:camafp:97-af35
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    References listed on IDEAS

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    6. Sanford J. Grossman & Oliver D. Hart, 1980. "Takeover Bids, the Free-Rider Problem, and the Theory of the Corporation," Bell Journal of Economics, The RAND Corporation, vol. 11(1), pages 42-64, Spring.
    7. Kenji Kojima, 1994. "An International Perspective on Japanese Corporate Finance," Kobe Economic & Business Review, Research Institute for Economics & Business Administration, Kobe University, vol. 39, pages 11-59.
    8. Baumol, William J, et al, 1970. "Earnings Retention, New Capital and the Growth of the Firm," The Review of Economics and Statistics, MIT Press, vol. 52(4), pages 345-355, November.
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    10. Cobham, David & Subramaniam, Ramesh, 1998. "Corporate finance in developing countries: New evidence for India," World Development, Elsevier, vol. 26(6), pages 1033-1047, June.
    11. Cosh, Andy & Hughes, Alan & Lee, Kevin & Singh, Ajit, 1996. "Takeovers, institutional investment and the persistence of profits," MPRA Paper 39061, University Library of Munich, Germany.
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    Cited by:

    1. Simon Deakin & Ajit Singh, 2009. "The Stock Market, the Market for Corporate Control and the Theory of the Firm: Legal and Economic Perspectives and Implications for Public Policy," Chapters,in: The Modern Firm, Corporate Governance and Investment, chapter 9 Edward Elgar Publishing.
    2. Ajit Singh, 2006. "Competition and Competition Policy in Emerging Markets: International and Developmental Dimensions," Chapters,in: Growth and Economic Development, chapter 12 Edward Elgar Publishing.
    3. Singh, Ajit & Singh, Alaka & Weisse, Bruce, 2002. "Corporate governance, competition, the new international financial architecture and large corporations in emerging markets," MPRA Paper 53665, University Library of Munich, Germany.
    4. Ajit Singh & Ann Zammit, 2006. "Corporate Governance, Crony Capitalism and Economic Crises: should the US business model replace the Asian way of "doing business"?," Corporate Governance: An International Review, Wiley Blackwell, pages 220-233.
    5. Ajit Singh & Jack Glen & Ann Zammit & Rafael De-Hoyos & Alaka Singh & Bruce Weisse, 2005. "Shareholder Value Maximisation, Stock Market and New Technology: Should the US Corporate Model be the Universal Standard?," International Review of Applied Economics, Taylor & Francis Journals, pages 419-437.
    6. Ajit Singh, 2003. "Competition, corporate governance and selection in emerging markets," Economic Journal, Royal Economic Society, vol. 113(491), pages 443-464, November.
    7. Kamat, Manoj & Kamat, Manasvi, 2007. "The New Information Age & the Stock Market Growth Puzzle," MPRA Paper 5158, University Library of Munich, Germany.
    8. Singh, Ajit & Weisse, Bruce, 1998. "The Asian model: a crisis foretold," MPRA Paper 54002, University Library of Munich, Germany.
    9. Glen, J. & Lee, K. & Singh. A., 2000. "Competition, Corporate Governance and Financing of corporate Growth in Emerging Markets," Accounting and Finance Discussion Papers 00-af46, Faculty of Economics, University of Cambridge.
    10. Simon Deakin & Ajit Singh, 2009. "The Stock Market, the Market for Corporate Control and the Theory of the Firm: Legal and Economic Perspectives and Implications for Public Policy," Chapters,in: The Modern Firm, Corporate Governance and Investment, chapter 9 Edward Elgar Publishing.
    11. Ajit Singh, 2003. "Corporate governance, corporate finance and stock markets in emerging countries," Working Papers wp258, Centre for Business Research, University of Cambridge.
    12. Jack Glen & Ajit Singh, 2005. "Corporate Governance, Competition, and Finance: Re-thinking Lessons from the Asian Crisis," Eastern Economic Journal, Eastern Economic Association, vol. 31(2), pages 219-243, Spring.
    13. Glen, J. & Lee, K. & Singh. A., 2000. "Competition, Corporate Governance and Financing of corporate Growth in Emerging Markets," Accounting and Finance Discussion Papers 00-af46, Faculty of Economics, University of Cambridge.
    14. Ajit Singh, 1999. "Should Africa promote stock market capitalism?," Journal of International Development, John Wiley & Sons, Ltd., vol. 11(3), pages 343-365.
    15. Singh, Ajit, 2003. "Corporate governance, the big business groups and the G-7 reform agenda: A critical analysis," MPRA Paper 24663, University Library of Munich, Germany.
    16. Singh, A. & Weisse, B. A., 1998. "Emerging Stock Markets, Portfolio Capital Flows and Long-term Economic Growth: Micro and Macroeconomic Perspectives," Accounting and Finance Discussion Papers 98-af40, Faculty of Economics, University of Cambridge.
    17. Singh, Ajit, 2010. "Are the Institutions of the Stock Market and the Market for Corporate Control Evolutionary Advances for Developing Countries?," MPRA Paper 24346, University Library of Munich, Germany.
    18. Uma Kambhampati, 2006. "Financial liberalisation, corporate governance and the efficiency if firms in Indian manufacturing," Economics & Management Discussion Papers em-dp2006-33, Henley Business School, Reading University.
    19. Singh, Ajit & Weisse, Bruce A., 1998. "Emerging stock markets, portfolio capital flows and long-term economie growth: Micro and macroeconomic perspectives," World Development, Elsevier, vol. 26(4), pages 607-622, April.
    20. Zou, Peng & Li, Guofeng, 2016. "How emerging market investors' value competitors' customer equity: Brand crisis spillover in China," Journal of Business Research, Elsevier, vol. 69(9), pages 3765-3771.
    21. Kambhampati, Uma S., 2006. "Financial liberalisation, corporate governance and the efficiency of firms in Indian manufacturing," Structural Change and Economic Dynamics, Elsevier, vol. 17(1), pages 46-69, January.

    More about this item

    JEL classification:

    • F6 - International Economics - - Economic Impacts of Globalization
    • G0 - Financial Economics - - General
    • G3 - Financial Economics - - Corporate Finance and Governance
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development

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