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Bank Credit And Sectoral Growth €“ Evidence From Indian States

Author

Listed:
  • GAUTAM NEGI

    (Lal Bahadur Shastri Institute of Management, New Delhi)

  • HIMANSHU MISHRA

    (Lal Bahadur Shastri Institute of Management, New Delhi)

Abstract

The study examines the growth effect of bank credit and its variation among the states of India for three sectors namely Agriculture, Industry, and Services. The gross value added (GVA) of sectors is taken as a proxy of growth with sectoral credit as the explanatory variable in addition to five control variables. The data set of 24 states for the period 2004-05 up to 2021-22 sourced from the Reserve Bank of India website is analyzed using the Generalized Method of Moments (GMM). Findings reveal growth effect of credit varies among states and is positive for the industry and services sector. The results highlight the significance of bank credit in sectoral output and add to the existing literature on the relationship between bank credit and the growth of sectors at the state level of India.

Suggested Citation

  • Gautam Negi & Himanshu Mishra, 2023. "Bank Credit And Sectoral Growth €“ Evidence From Indian States," Review of Economic and Business Studies, Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, issue 31, pages 65-84, June.
    • Handle: RePEc:aic:revebs:y:2023:j:31:negig
    DOI: 10.47743/rebs-2023-1-0004
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    References listed on IDEAS

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    More about this item

    Keywords

    Bank credit; Gross value added; Growth effect; Sectoral output; Generalized Method of Moments;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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