The Role of Capital Market and Banks in Economic Development of India
Paper published in the International conference on Enhancing Economic Productivity and Competitiveness through Financial and Monetary Reforms at GTU – Ahmedabad on 6th and 7th October, 2017. ISBN 978935281-176-2.
9 Pages Posted: 7 Jun 2019
Date Written: October 2017
The sound financial system contributes in overall development of the country by collecting and converting the funds into productive usage. The corporate collects funds in the form of equity or debt, earns return on investment, develops infrastructure and generates employment which results into the economic development of the country. This research paper has evaluated the relationship between market capitalization of BSE, banking business and economic development. The data of quarterly market capitalisation of Bombay Stock Exchange (BSE), Business of all commercial scheduled banks and Gross Domestic Product (GDP) were collected from 1999: Q1 to 2015: Q4. The ordinary Least Square method was applied to check the causal relationship among variables. The results of the study suggest a positive relationship between the stock market, banking business and the economic growth.
Keywords: Financial market, Banking business, Economic Growth and OLS
JEL Classification: G21
Suggested Citation: Suggested Citation