Creditor Protection and Banking System Development in India

Gregory James (), Simon Deakin () and Panicos Demetriades
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Simon Deakin: Centre for Business Research, University of Cambridge

Discussion Paper Series from Department of Economics, Loughborough University

Abstract: We use a new legal dataset tracking changes in creditor protection law over several decades to study the impact of legal reforms on banking system development in India. Cointegration analysis is used to show that the strengthening of creditor rights in relation to the enforcement of security interests in the 1990s and 2000s led to an increase in bank credit. We show that the change in the law was not endogenous to trends in stock market development and GDP per capita, and that the direction of causation ran from legal reform to banking development, rather than the reverse.

Keywords: creditor rights; legal origin; banking development; India. (search for similar items in EconPapers)
JEL-codes: G21 G38 K22 O16 (search for similar items in EconPapers)
Date: 2009-08, Revised 2009-08
New Economics Papers: this item is included in nep-ban, nep-cwa and nep-dev
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Related works:
Journal Article: Creditor protection and banking system development in India (2010)
Working Paper: Creditor Protection and Banking System Development in India (2008)
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