Productivity, ownership and firm growth: evidence from Indian banks

Saibal Ghosh

International Journal of Emerging Markets, 2016, vol. 11, issue 4, 607-631

Abstract: Purpose - The relation between size and growth in banking firms in emerging economies has not been adequately addressed in the literature. By employing data for 1992-2014, the purpose of this paper is to examine the relationship between growth and productivity and how it interacts with ownership. Design/methodology/approach - The longitudinal nature of the data suggests that the appropriate technique for the analysis is panel data econometrics. Accordingly, consistent with prior research, the author employs a fixed effects model. Besides accounting for firm-level observables, the author controls the economic environment and bank ownership by employing real GDP growth and ownership dummies. Findings - The evidence appears to suggest that growth improves through both active and passive learning, the magnitude of the former far outweighing that of the latter. These results are remarkably robust: both baseline regressions and sensitivity tests point to similar conclusions. Originality/value - To the best of the author’s knowledge, the paper makes two original contributions. First and more broadly, it tests the relationship between growth and productivity for banks in a leading emerging economy. Second, it distinguishes between two kinds of learning – active and passive – and explores which of them are more relevant for growth.

Keywords: Knowledge spillovers; Emerging economies; Banks/other depository institutions (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eme:ijoemp:ijoem-05-2015-0096

DOI: 10.1108/IJoEM-05-2015-0096

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