CONSTRAINTS TO FOREIGN DIRECT INVESTMENT IN INDIAN HOSPITALS

Rupa Chanda ()
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Rupa Chanda: Indian Institute of Management Bangalore, Bannerghatta Road, Bangalore 560076, India

Journal of International Commerce, Economics and Policy (JICEP), 2010, vol. 01, issue 01, 121-143

Abstract: This paper examines the impact of a liberalised foreign direct investment (FDI) regime in Indian hospitals on FDI inflows. The paper shows that there is hardly any FDI in Indian hospitals due to domestic constraints such as high initial establishment costs, low health insurance penetration, manpower shortages, high cost of medical equipment, and regulatory deficiencies. These constraints also impede domestic investment in hospitals. The paper concludes that a liberal foreign investment regime may not result in increased FDI inflows if regulatory and structural impediments continue to constrain investment in the host economy. Investment liberalisation must thus be supplemented by domestic regulatory reforms to create an environment that is conducive to all investors.

Keywords: Foreign direct investment (FDI); hospitals; India; constraints; regulations; reforms; F1; F2 (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (2)

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DOI: 10.1142/S1793993310000020

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