Financing firms in India
Date
2012-07
Authors
Allen, Franklin
Chakrabarti, Rajesh
De, Sankar
Qian, Jun “QJ”
Qian, Meijun
Journal Title
Journal ISSN
Volume Title
Publisher
Elsevier
Abstract
With extensive cross-country datasets and India firm samples, as
well as our own surveys of small and medium firms, we examine
the legal and business environments, financing channels, and
growth patterns of different types of firms in India. Despite the
English common-law origin and a British-style judicial system,
Indian firms face weak investor protection in practice and poor
institutions characterized by corruption and inefficiency. Alternative
finance, including financing from all nonbank, nonmarket
sources, and generally backed by nonlegal mechanisms, constitutes
the most important form of external finance. Bank loans provide
the second most important external financing source. Firms with
access to bank or market finance are not associated with higher
growth rates. Our results indicate that bank and market finance
is not superior to alternative finance in fast-growing economies
such as India.
Description
Keywords
India, Banks, Markets, Alternative finance, Small and medium enterprises, Growth
Citation
Collections
Source
Journal of Financial Intermediation
Type
Journal article
Book Title
Entity type
Access Statement
Open Access