Author : International Monetary Fund
Publisher : International Monetary Fund
ISBN 13 : 1451860447
Total Pages : 27 pages
Book Rating : 4.4/5 (518 download)
Book Synopsis Monetary Policy and Corporate Behavior in India by : International Monetary Fund
Download or read book Monetary Policy and Corporate Behavior in India written by International Monetary Fund and published by International Monetary Fund. This book was released on 2005-02-01 with total page 27 pages. Available in PDF, EPUB and Kindle. Book excerpt: The paper examines the association and corporate behavior for a sample of manufacturing firms in India for the post-reform period 1992-2003. The findings suggest that a contractionary monetary policy lowers overall debt including bank debt, although the lagged response is positive, and listed firms increase their short-term bank borrowings, after monetary tightening. The responses of corporates to a monetary contraction in the post-1997 period has been more pronounced. A disaggregated analysis of responses of firms according to size and leverage largely validates these findings. Two policy implications emerge from the analysis. First, the interest rate transmission channel has strengthened since 1998, and, second, corporates in India, especially listed ones, seem to exhibit relationship lending.