Editorial

Abstract

In this latest issue of Decision we present four research articles, one case study and two book reviews. The first article by Md. Rabiul attempts to investigate the impact of the development of banks and stock markets on economic growth in a sample of developing countries for the period of 1973 to 2002 using the Generalized Method of Moments. His empirical results demonstrate that banks and stock markets have separate as well as aggregate effects on economic growth. The second article by Sumit K. Majumdar and Kunal Sen, studies the effects of debt structure on a firm’s strategic behaviour, such as diversification, advertising and out-sourcing, in the Indian context. Sen finds that firms which rely on arm’s-length debt have better performance and are more likely to engage in advertising and diversification than firms which rely on borrowing from institutional lenders such as term-lending institutions. He argues that the public ownership of many institutional lenders may explain why they have not been able to monitor firms as effectively as arm’s-length debt holders who are mostly in the private sector.