IDEAS home Printed from https://ideas.repec.org/p/imf/imfwpa/12-70.html
   My bibliography  Save this paper

Does the Business Environment Affect Corporate Investment in India?

Author

Listed:
  • Kiichi Tokuoka

Abstract

Since the global financial crisis, corporate investment has been weak in India. Sluggish corporate investment would not only moderate growth from the demand side but also constrain growth from the supply side over time. Against this background, this paper analyzes the reasons for the slowdown and discusses how India can boost corporate investment, using both macro and firm-level micro data. Analysis of macro data indicates that macroeconomic factors can largely explain corporate investment but that they do not appear to account fully for recent weak performance, suggesting a key role of the business environment in reviving corporate investment. Analysis of micro panel data suggests that improving the business environment by reducing costs of doing business, improving financial access, and developing infrastructure, could stimulate corporate investment.

Suggested Citation

  • Kiichi Tokuoka, 2012. "Does the Business Environment Affect Corporate Investment in India?," IMF Working Papers 12/70, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:12/70
    as

    Download full text from publisher

    File URL: http://www.imf.org/external/pubs/cat/longres.aspx?sk=25762
    Download Restriction: no

    References listed on IDEAS

    as
    1. Kochhar, Kalpana & Kumar, Utsav & Rajan, Raghuram & Subramanian, Arvind & Tokatlidis, Ioannis, 2006. "India's pattern of development: What happened, what follows?," Journal of Monetary Economics, Elsevier, pages 981-1019.
    2. Robert Jensen, 2007. "The Digital Provide: Information (Technology), Market Performance, and Welfare in the South Indian Fisheries Sector," The Quarterly Journal of Economics, Oxford University Press, vol. 122(3), pages 879-924.
    3. Petia Topalova & Amit Khandelwal, 2011. "Trade Liberalization and Firm Productivity: The Case of India," The Review of Economics and Statistics, MIT Press, pages 995-1009.
    4. World Bank & International Finance Corporation, "undated". "Doing Business in India 2009," World Bank Other Operational Studies 28088, The World Bank.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Kunal Sen & Sabyasachi Kar & Jagadish Prasad Sahu, 2014. "The political economy of economic growth in India, 1993-2013," Brooks World Poverty Institute Working Paper Series esid-044-14, BWPI, The University of Manchester.
    2. repec:spr:fininn:v:2:y:2016:i:1:d:10.1186_s40854-016-0028-7 is not listed on IDEAS
    3. Peter Lindner & Sung Eun Jung, 2014. "Corporate Vulnerabilities in India and Banks' Loan Performance," IMF Working Papers 14/232, International Monetary Fund.
    4. Saba Mushtaq & Danish Ahmed Siddiqui, 2016. "Effect of interest rate on economic performance: evidence from Islamic and non-Islamic economies," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 2(1), pages 1-14, December.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:imf:imfwpa:12/70. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jim Beardow) or (Hassan Zaidi). General contact details of provider: http://edirc.repec.org/data/imfffus.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.