Does monetary policy matter for corporate governance? Firm-level evidence for India

Saibal Ghosh and Rudra Sensarma

MPRA Paper from University Library of Munich, Germany

Abstract: The paper assembles data on over 1,000 manufacturing and services firms in India for the entire post-reform period from 1992 through 2002 to examine the association between corporate governance and monetary policy. The findings suggests that (a) public firms are relatively more responsive to a monetary contraction vis-à-vis their private counterparts; and, (b) quoted firms lower their long-term bank borrowings in favour of short-term borrowings, post monetary tightening, as compared with unquoted firms. A disaggregated analysis based on firm size and leverage above a certain threshold validates these findings. The study concludes by analyzing the broad policy implications of these findings.

Keywords: monetary policy; corporate governance; relationship lending; leverage; India (search for similar items in EconPapers)
JEL-codes: G32 (search for similar items in EconPapers)
Date: 2004
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Citations: View citations in EconPapers (16)

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Chapter: DOES MONETARY POLICY MATTER FOR CORPORATE GOVERNANCE? FIRM-LEVEL EVIDENCE FROM INDIA (2004)
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