Artha Vijnana: Journal of The Gokhale Institute of Politics and Economics

Saumitra N. Bhaduri ¹

Affiliations
1 Madras School of Economics, Chennai 25, IN

Abstract

This paper analyses the effect of financial liberalization, particularly equity market reforms on firm's choice of financial structure. The poper approaches the question with the use of two concepts: traditional sources and uses of funds and a concept of "marginal propensity towards debt", which measures the proportion of cash flow deficit being financed by debt. Our result provides some insight into the validity of received wisdom in explaining the behaviour of Indian corporate in response to the increasing "marketization" of financial system.

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K. R. Shanmugam ¹, Saumitra N. Bhaduri ¹

Affiliations
1 Madras School of Economics, Behind Government Data Centre, Chennai 600 025, IN

Abstract

This study provides a few composite indices of development, using the State level data for 1981 and 1991. It uses the principal component technique, which provides a straightforward procedure for deriving a single index from a multiplicity of variables, Income and basic need indicators. The results show that a considerable inter-State inequality exists in the case of income, basic needs and overall development index. The overall development and income indices indicate that the inequality has slightly declined during the last decade. However, the income inequality is much lower than the inequality in the overall development. We hope that this study will help policy makers to identify the States making improvement in the living standards and to know whether the State disparity has been reduced over time in India.

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