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Innovation and Financial Liberalization: The Case of India

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  • James B. ANG

    (Division of Economics, School of Humanities and Social Sciences, Nanyang Technological University, Singapore, 637332.)

Abstract

This 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 time series data for India over the period 1963-2005, the results indicate that interest rate restraints help generate ideas. 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. These results lend some support to the argument that some form of financial sector reforms may help stimulate economic growth via increasing technological innovation.

Suggested Citation

  • James B. ANG, 2014. "Innovation and Financial Liberalization: The Case of India," Economic Growth Centre Working Paper Series 1404, Nanyang Technological University, School of Social Sciences, Economic Growth Centre.
  • Handle: RePEc:nan:wpaper:1404
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    File URL: http://www3.ntu.edu.sg/hss2/egc/wp/2014/2014-04.pdf
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    References listed on IDEAS

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    Cited by:

    1. Chronopoulos, Michail & Lumbreras, Sara, 2017. "Optimal regime switching under risk aversion and uncertainty," European Journal of Operational Research, Elsevier, vol. 256(2), pages 543-555.
    2. repec:wsi:ijimxx:v:22:y:2018:i:03:n:s1363919618500299 is not listed on IDEAS

    More about this item

    Keywords

    financial liberalization; Schumpeterian growth;

    JEL classification:

    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East

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