Are small and medium enterprises constrained by the inability to raise funds from the equity markets? Evidence from the creation of a new platform in the Bombay Stock Exchange

Small and medium enterprises employ 40% of India’s workforce, and account for 45% of the manufacturing output and 40% of the total exports of the country. However, productivity in the sector is very low and it contributes only 17% to the GDP. Most of the firms remain small and unregistered, with limited access to finance. This project examines the impact of the introduction of a platform exclusively reserved for the SMEs for the purpose of raising equity finance in the Bombay Stock exchange, on financial constraints, growth, and competitiveness of the sector.

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