Effects of land misallocation on capital allocations in India

Gilles Duranton, Syed Ejaz Ghani, Arti Goswami Grover, William Robert Kerr, Gilles Duranton, Syed Ejaz Ghani, Arti Grover Goswami and William Robert Kerr
Authors registered in the RePEc Author Service: Arti Grover, Gilles Duranton, William Kerr and SYED Ejaz Ghani ()

No 7451, Policy Research Working Paper Series from The World Bank

Abstract: Growing research and policy interest focuses on the misallocation of output and factors of production in developing economies. This paper considers the possible misallocation of financial loans. Using plant-level data on the organized and unorganized sectors, the paper describes the temporal, geographic, and industry distributions of financial loans. The focus of the analysis is the hypothesis that land misallocation might be an important determinant of financial misallocation (for example, because of the role of land as collateral against loans). Using district-industry variations, the analysis finds evidence to support this hypothesis, although it does not find a total reduction in the intensity of financial loans or those being given to new entrants. The analysis also considers differences by gender of business owners and workers in firms. Although potential early gaps for businesses with substantial female employment have disappeared in the organized sector, a sizeable and persistent gap remains in the unorganized sector.

Keywords: Textiles; Apparel&Leather Industry; Pulp&Paper Industry; General Manufacturing; Food&Beverage Industry; Common Carriers Industry; Business Cycles and Stabilization Policies; Construction Industry; Plastics&Rubber Industry; Access to Finance; Financial Economics; Finance and Development; Private Sector Economics; Marketing; Private Sector Development Law; Labor Markets (search for similar items in EconPapers)
Date: 2015-10-20
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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