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Reforms and Investment in India

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  • Prema-Chandra Athukorala
  • Kunal Sen

Abstract

This paper examines the determinants of private corporate investment in India with emphasis on the implications of the policy reforms initiated in 1991. The results suggest that the net impact of the reforms on corporate investment has been salutary. The adverse impact of the decline in public investment has been outweighed by the positive effects of the decline in the cost of capital and favourable changes in investor perception brought about by the reforms. While it is not possible to generalise from a single country case, our results cast doubt on the existing cross-country evidence of a negative impact of structural adjustment reforms on private investment.
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Suggested Citation

  • Prema-Chandra Athukorala & Kunal Sen, 1996. "Reforms and Investment in India," Trade and Development 96/6, Australian National University, Department of Economics.
    • Handle: RePEc:wop:anuetd:9606
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    File URL: http://coombs.anu.edu.au/~ecopac/wpaper/wp1996/966.prn
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    References listed on IDEAS

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    Cited by:

    1. M. Shahe Emran & Forhad Shilpi & M. Imam Alam, 2007. "Economic liberalization and price response of aggregate private investment: time series evidence from India," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 40(3), pages 914-934, August.

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    More about this item

    JEL classification:

    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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