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Banking Reform in India∗ - page 47 / 57

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1. Sample with Changes in limit post*big

0.194 (.106) 152

0.168 (.118) 136

0.538 (.281) 141

2. Sample without Change in limit post*big

0.007 (.074) 301

0.022 (.081) 285

0.280 (.473) 250

3. Whole sample post*big

0.071 (.068) 453

0.071 (.069) 421

0.316 (.368) 391

Complete Sample

Sample without substitution

-log(profit)t-1

OLS

OLS

OLS

(1)

(2)

(3)

1.79 (.94) 141

A. Reduced Form Estimatesb

a

B. IV Estimates 1. Sample with Changes in limit Log(loans)t-log(loans)t-1 0.75 (.37) 152 Source: Authors' calculations from account-level data from a Public Sector bank in India.

Table 2: Credit constraints: Effect of the reform on sales, sales to loan ratios, and profits (OLS regressions)

Dependent variables Log(sales)t-log(sales)t-1

Log(profit)t

a-The regression include a dummy for whether the firm has investment in plant and machinery above Rs 6.5 Million, and a dummy for whether the data is for 1998 and later. The interaction between the two variables is used as the instrument. Standard errors (corrected for clustering at the sector level and heterosckedasticity) in parentheses below the coefficients. The number of observations is given below the standard error. b-In Panel A, each entry gives the coefficient on the post*big interaction in the reduced form regression. In panel B, the IV estimate is given.

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