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Pro-market reforms and allocation of capital in India

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Author Info

  • Sameeksha Desai
  • Johan Eklund
  • Andreas Högberg

Abstract

Purpose – The purpose of this paper is to study the efficiency of capital allocation, across levels of ownership, in the aftermath of pro-market reforms in India. Design/methodology/approach – The paper measures investment efficiency using the accelerator principle and examines the effect of ownership type on capital allocation. Findings – No significant improvement in capital allocation during the period studied is found. The findings suggest firms face significant costs in adjusting their capital stock. Originality/value – The paper uses unique data to estimate the elasticity of capital with respect to output. JEL classification: E22, E23, G18, G20, E44, L50

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Bibliographic Info

Article provided by Emerald Group Publishing in its journal Journal of Financial Economic Policy.

Volume (Year): 3 (2011)
Issue (Month): 2 (July)
Pages: 123-139

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Handle: RePEc:eme:jfeppp:v:3:y:2011:i:2:p:123-139

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Related research

Keywords: Capital; Corporate ownership; Cost allocation; Economic reform; India;

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References

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