Random Effect Approach : Global Financial Crisis Impact on Indian Basic Metal Industry

The collapse of the housing sector in 2007-2008 offset the global financial crisis which lead to the decoupling of most economies around the world leading to a spillover which affected most countries. India was also impacted by this crisis and especially the trade channel had a greater effect. This study focuses on understanding the impact of the financial crisis on the basic metal industry. A sample of 4384 basic metal firms were analyzed using both pooled OLS and Random effects model. The study found that significant impact of the financial crisis, depreciation intensity and firm size on performance and efficiency of firms across both the regression models. The implications of the study have been discussed further.