To read this content please select one of the options below:

Productivity, ownership and firm growth: evidence from Indian banks

Saibal Ghosh (Reserve Bank of India, Mumbai, India)

International Journal of Emerging Markets

ISSN: 1746-8809

Article publication date: 19 September 2016

577

Abstract

Purpose

The relation between size and growth in banking firms in emerging economies has not been adequately addressed in the literature. By employing data for 1992-2014, the purpose of this paper is to examine the relationship between growth and productivity and how it interacts with ownership.

Design/methodology/approach

The longitudinal nature of the data suggests that the appropriate technique for the analysis is panel data econometrics. Accordingly, consistent with prior research, the author employs a fixed effects model. Besides accounting for firm-level observables, the author controls the economic environment and bank ownership by employing real GDP growth and ownership dummies.

Findings

The evidence appears to suggest that growth improves through both active and passive learning, the magnitude of the former far outweighing that of the latter. These results are remarkably robust: both baseline regressions and sensitivity tests point to similar conclusions.

Originality/value

To the best of the author’s knowledge, the paper makes two original contributions. First and more broadly, it tests the relationship between growth and productivity for banks in a leading emerging economy. Second, it distinguishes between two kinds of learning – active and passive – and explores which of them are more relevant for growth.

Keywords

Citation

Ghosh, S. (2016), "Productivity, ownership and firm growth: evidence from Indian banks", International Journal of Emerging Markets, Vol. 11 No. 4, pp. 607-631. https://doi.org/10.1108/IJoEM-05-2015-0096

Publisher

:

Emerald Group Publishing Limited

Copyright © 2016, Emerald Group Publishing Limited

Related articles