Co–Integration Analysis of Relationship between Institutional Finance and Entrepreneurial Development in Karnataka

Premakumara GS; Mahadevappa M.M.

Volume : IV, Issue : VIII, August - 2014

Co–Integration Analysis of Relationship between Institutional Finance and Entrepreneurial Development in Karnataka

Premakumara Gs, Mahadevappa M. M.

Abstract :

There have been wide opportunities in Karnataka for business and entrepreneurial activities. The government of Karnataka has set–up an exclusive institution namely, Karnataka State Finance Corporation to promote entrepreneurial and developmental activities by providing necessary finance. The present paper exhibit the relationship between institutional finance and industrial development in Karnataka.  With the help of co–integration analysis we have attempted to find the long–run stable relationship between institutional finance and industrial development. It has been found from the co–integration analysis that the institutional finance has long–run stable relationship with gross capital formation, employment, index of consumer goods, index of consumer durables and index of capital goods. Hence, there has been strong relationship between institutional finance and entrepreneurship development, but, insufficient to promote entrepreneurial development. Therefore, there is dire need to strengthen KSFC and institutional finance for effective entrepreneurial development. 