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Building a BRIC?: stock market opening and investment finance in India since liberalization

Research output: Contribution to journalJournal articlepeer-review

Published
<mark>Journal publication date</mark>06/2012
<mark>Journal</mark>World Development
Issue number6
Volume40
Number of pages13
Pages (from-to)1109-1121
Publication StatusPublished
<mark>Original language</mark>English

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.