Building a BRIC? Stock Market Opening and Investment Finance in India since Liberalization

Nicholas Snowden and Jesús Muñoz

World Development, 2012, vol. 40, issue 6, 1109-1121

Abstract: Portfolio equity inflows have been a feature of India’s improved growth performance in recent years. This study examines a possible connection through the equity financing of capital formation by manufacturing firms. Emphasis is placed on the funding preferences of owner-controlled enterprises with the empirical results connecting equity issues to the management of gearing and the availability of internal funds. This context suggests strongly that equity and debt are complementary choices, although two channels of influence—macroeconomic and allocative—combine to encourage investment spending, with pro-cyclical implications.

Keywords: Asia; India; portfolio equity; stock markets; capital investment; owner-control (search for similar items in EconPapers)
Date: 2012
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Persistent link: https://EconPapers.repec.org/RePEc:eee:wdevel:v:40:y:2012:i:6:p:1109-1121

DOI: 10.1016/j.worlddev.2011.12.010

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