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Does the institution of State Business Relations matter for Firm Performance? – A study of Indian Manufacturing

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  • Kathuria, Vinish
  • Natarajan, Rajesh Raj
  • Sen, Kunal

Abstract

This paper examines the role of the external institutional environment captured by effective state-business relations on firm performance. By effective state-business relations, we mean a set of highly institutionalized, responsive and public interactions between the state and the business sector. We find that effective state-business relations have had a discernible positive impact on firm performance in Indian formal manufacturing for the years 2000-01 and 2004-05. We also find internal and external institutional factors are complementary to firm performance - smaller firms, firms in urban areas, older firms and firms in simpler organizational forms benefit more.

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File URL: http://mpra.ub.uni-muenchen.de/23053/
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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 23053.

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Date of creation: 03 Jun 2010
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Handle: RePEc:pra:mprapa:23053

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Keywords: State business relations; firm productivity; manufacturing sector; India;

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