Assessing the Impact of Financial and Capital Market Reforms on Firms’ Corporate Financing Patterns in India

研究成果: Article

12 引用 (Scopus)

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India's financial and capital market reforms since the early nineties have positively impacted on the performance of the banking sector and the capital market. Based on the 5,000 firm-level database, this article shows that high-quality firms—defined as those that are profitable, have access to the commercial paper market and face relatively stable profitability—have reduced the proportion of loans further in 1997-2001 as compared with the period of 1992-96. This tendency strengthened during the period when the IPO requirement was tightened and the stock-market boom collapsed (so that many firms increased recourse to bank loans). This indicates that the capital market has succeeded in differentiating high-quality firms from low-quality ones, thereby making it cheaper for the former to raise funds from the market. Given the frequent cases of malpractice and price riggings, however, the government still needs to make continuous efforts to improve the infrastructure by strengthening penalty associated with malpractice, tightening accounting and auditing standards, and providing timely and precise information.

元の言語English
ページ(範囲)189-208
ページ数20
ジャーナルSouth Asia Economic Journal
5
発行部数2
DOI
出版物ステータスPublished - 2004

ASJC Scopus subject areas

  • Economics, Econometrics and Finance(all)

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