Stock Market and Manufacturing Sector in India

The interaction of the financial sector particularly the growth effects of stock market on the real economy is a matter to be probed. Over the past few decades the world stock markets have surged and emerging market countries have accounted for a large share of this boom. The growth of stock markets in emerging markets is partly due to the shift in policies from 'financial repression' to 'financial liberalization' which led to an increasing significance of capital markets in the allocation of financial resources. The study has ventured to analyze the impact of financial development, financial structure and financial reforms on private corporate manufacturing industries. Along with this the study also examined the influence of stock market development on industries capital structure, where in the factors affecting fixed capital expenditure across the industries also examined. The study covers the period from 1990 to 2007. The main aim of the study is to investigate the influence of reforms on growth of value added, investment patterns and foreign portfolio investments in Indian industries.