Financial Development and Economic Growth: Governance of Financial Institutions
Published: 2018
Author(s) Name: Dhiren Jotwani |
Author(s) Affiliation: Assist. Prof., Economics and Finance Area, Inst. of Mgt., Nirma Univ., Gandhinagar, Gujarat, India.
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Abstract
India has witnessed significant growth in the economy over the past seven decades. Economic growth has been consistent and
higher than many other developed countries even though there were few ups and downs. At the same time, the financial system has seen drastic
changes, from composition, to markets and instruments, and to governance systems. In this study, first the process of financial development is
studied. The issue of governance in financial systems is discussed. Next, the impact of financial development is studied, using type of financial
institution to indicate governance, on the economy’s overall development. It is hypothesised that the quality of governance of financial systems
will affect financial development and ultimately growth. It leads to the finding that the financial system contributes to economic growth in
India. Governance of financial systems is crucial, but does not impede the process.
Keywords: Corporate Governance, Economic Growth, Financial Development
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