40 India’s Financial Markets
to 20 days. Finally, the expenditure on energy per unit gross value added
dropped from 0.23 to 0.18. Hence, all the efficiency measures show significant
improvement from 1999–2000 to 2004–2005.
2.3 ROLE OF EQUITY FINANCING
There is an extensive literature that compares “bank-dominated” financial sys-
tems against “market-dominated” financial systems. In the latter, the dominant
forces shaping the allocation of capital are the stock market and the bond mar-
ket. In contrast, bank-dominated financial systems accord primacy to banks in
shaping resource allocation. Since earlier financial sector reforms had a focus
on equity market development in India, we seek to understand if the reforms
made an impact on the financing decisions