Liberalization and business investment in India
Date
2001
Authors
Athukorala, Prema-Chandra
Sen, Kunal
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ASARC
Abstract
This paper develops a model of business investment in developing countries and illustrates it through an application to India. The model is derived from the standard theory of business investment, with appropriate adoption to reflect structural features specific to developing countries. The estimation results suggest that the level of the capital stock, rental cost of capital, the level of domestic economic activity and public investment are significant determinants of business investment in India. Our results help explain the behaviour of business investment in India following the structural adjustment reforms in 1991.
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India, business investment, developing countries
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Conference paper
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