Pro‐market reforms and allocation of capital in India

Sameeksha Desai (), Johan Eklund () and Andreas Högberg ()

Journal of Financial Economic Policy, 2011, vol. 3, issue 2, 123-139

Abstract: Purpose - The purpose of this paper is to study the efficiency of capital allocation, across levels of ownership, in the aftermath of pro‐market reforms in India. Design/methodology/approach - The paper measures investment efficiency using the accelerator principle and examines the effect of ownership type on capital allocation. Findings - No significant improvement in capital allocation during the period studied is found. The findings suggest firms face significant costs in adjusting their capital stock. Originality/value - The paper uses unique data to estimate the elasticity of capital with respect to output.

Keywords: Capital; Cost allocation; Economic reform; Corporate ownership; India (search for similar items in EconPapers)
Date: 2011
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Related works:
Working Paper: Promarket reforms and allocation of capital in India (2009)
Working Paper: Promarket Reforms and Allocation of Capital in India (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:eme:jfeppp:v:3:y:2011:i:2:p:123-139

DOI: 10.1108/17576381111133606

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