An analysis of the efficacy of financial system on corporate investment in India; A draft analytical methodology
The role of financial system in economic development is imperative. It is the life blood of any modern economy. Financial system diffuses finance into the entire body of the economy making possible the coherent synergy between allocation of resources and optimum level investment. But the financial system in India was somewhat tethered by way of pre-emption of resources and administered interest rate before 1991. The objective of financial sector reforms as part of the structural adjustment program was to enable the financial system to act as an essential conduit for augmenting investment. In this circumstance, an attempt was made to analyze the impact of capital market reforms on corporate investment behaviour in India. Here we present the methodology of the study conducted for the period 1983-2003 by dividing the temporal dimensions into the pre-reform (1983-1991) and post-reform (1992-2003) periods.