Financial Development and Growth in India : A Growing Tiger in a Cage?

Author/Editor:

Hiroko Oura

Publication Date:

March 1, 2008

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

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.

Series:

Working Paper No. 08/79

Subject:

English

Publication Date:

March 1, 2008

ISBN/ISSN:

9781451869408/1018-5941

Stock No:

WPIEA2008079

Price:

$18.00 (Academic Rate:$18.00)

Format:

Paper

Pages:

30

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