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Overview of the Indian Corporate Sector: 1989-2002

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  • Petia Topalova

Abstract

This paper uses firm-level data to examine the performance of India's nonfinancial corporate sector since 1989 and evaluate its financial vulnerabilities. While promising trends in liquidity, profitability, and leverage of the sector emerged in the early 1990s, they experienced a reversal after 1996. Nonetheless, most indicators were still at comfortable levels, and there is evidence of improvement in 2002, the last year in our sample. However, a number of firms still face problems servicing their debt obligations, posing a risk to lenders. In particular, the aggregate interest coverage of the corporate sector indicates that potential nonperforming loans of the corporate sector remain high. This underscores the need for close monitoring of the corporate sector in the future.

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  • Petia Topalova, 2004. "Overview of the Indian Corporate Sector: 1989-2002," IMF Working Papers 2004/064, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2004/064
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    Cited by:

    1. Maria Bas & Ivan Ledezma, 2020. "Trade liberalization and heterogeneous firms’ adjustments: evidence from India," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 156(2), pages 407-441, May.
    2. Maria Bas, 2013. "Does Services Liberalization Affect Manufacturing Firms' Export Performance? Evidence from India," Working Papers 2013-17, CEPII research center.
    3. Maria Bas & Antoine Berthou, 2017. "Does Input-Trade Liberalization Affect Firms’ Foreign Technology Choice?," The World Bank Economic Review, World Bank, vol. 31(2), pages 351-384.
    4. Maria Bas & Antoine Berthou, 2021. "Financial development, reallocation and growth: Firm heterogeneity matters," The World Economy, Wiley Blackwell, vol. 44(5), pages 1205-1231, May.
    5. Joy Jia & Mike Adams & Mike Buckle, 2012. "Insurance and ownership structure in India’s corporate sector," Asia Pacific Journal of Management, Springer, vol. 29(1), pages 129-149, March.
    6. Maria Bas & Antoine Berthou, 2012. "The Unequal Effects of Financial Development on Firms' Growth in India," Working Papers 2012-22, CEPII research center.

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