Rain, Rain, Go Away? The Investment Climate, State Business Relations and Firm Performance in India

Kathuria Vinish, Rajesh Raj and Kunal Sen

MPRA Paper from University Library of Munich, Germany

Abstract: It is commonly argued that a better investment climate reform – that is, lower distortions in the institutional, policy and regulatory environment in which firms operate - lead to discernible improvements in firm performance. In this paper, we argue that effective state business relations condition better investment climate outcomes and that the deeper institutional determinants of firm performance are the former. We examine the effect of effective state-business relations of total factor productivity (TFP) for formal sector firms in India for the years 2000-01 and 2004-05 and find support for this hypothesis.

Keywords: State business relations; total factor productivity; India (search for similar items in EconPapers)
JEL-codes: D24 (search for similar items in EconPapers)
Date: 2010-01-23
New Economics Papers: this item is included in nep-cwa, nep-eff and nep-sbm
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:20316

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