The current study investigates whether financial loans for manufacturing establishments can be affected by the misallocation of factors such as land, buildings, and labor markets in India, employing plant-level data on the organized and less organized sectors. This study has demonstrated that the misallocation in those three inputs might have a significant and different impact on several outcomes in financial access.

The present study confirms previous findings and contributes additional evidence in terms of the negative relationship between higher misallocation and loan activity through the robustness tests using a large dataset. Therefore, this paper might provide a useful policy implication for making land allocation more effective to improve financial allocation. The findings would be more persuasive if omitted variables such as human capital and the size of firms had included, giving a specific definition of land misallocation.

*The sentences are grammatically correct.

omitted/ removed