Liberalization and business investment in India

Date

2001

Authors

Athukorala, Prema-Chandra
Sen, Kunal

Journal Title

Journal ISSN

Volume Title

Publisher

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.

Description

Keywords

India, business investment, developing countries

Citation

Source

Type

Conference paper

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