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Drivers of Corporate Investment in India: Assessing the Impact of Monetary Policy and COVID

Author

Listed:
  • Kashyap Gupta
  • Sunil Kumar
  • Sarthak Gulati

Abstract

Empirical investigation finds that firm-specific factors, namely deleveraging of balance sheets, comfortable cash flows and improving debt servicing capacity impact fixed investment in private corporate sector positively. Monetary policy impacts fixed assets investment growth of financially constrained firms more compared to non-financially constrained firms. Furthermore, the impact of COVID pandemic on investment was more adverse in case of weak firms. JEL Codes: G3, E22, O16, E52

Suggested Citation

  • Kashyap Gupta & Sunil Kumar & Sarthak Gulati, 2023. "Drivers of Corporate Investment in India: Assessing the Impact of Monetary Policy and COVID," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 24(2), pages 216-251, September.
    • Handle: RePEc:sae:soueco:v:24:y:2023:i:2:p:216-251
    DOI: 10.1177/13915614231192775
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    More about this item

    Keywords

    Economic policy; financial investment/analysis; firm performance; India; macroeconomics;
    All these keywords.

    JEL classification:

    • G3 - Financial Economics - - Corporate Finance and Governance
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy

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