COLONIALISM, POLITICAL RISK, AND FIRM PERFORMANCE: EVIDENCE FROM INDIA

James Fenske, Bishnupriya Gupta and Junxi Liu

No 22154, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: Did political risk constrain foreign investment under colonial rule? We compare British and Indian firms in interwar India using novel panel data. Although risk increased for British firms, we find little evidence of capital withdrawal. Financial outcomes differed mainly across industries, while board Indianization and cross-group interlocks increased only gradually and unevenly. British managing agents likewise remained concentrated in familiar sectors, accommodating Indian participation without substantial diversification. Rather than withdrawing uniformly, British firms added Indian directors where local capital, market knowledge, and commercial connections became valuable, while remaining concentrated in industries supported by established expertise and commercial networks.

Keywords: Firms; Colonial linkages; Political uncertainty; Capital flight (search for similar items in EconPapers)
JEL-codes: N20 N65 N85 (search for similar items in EconPapers)
Date: 2026-11
References: Add references at CitEc
Citations:

Downloads: (external link)
https://cepr.org/publications/DP22154 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:22154

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP22154

Access Statistics for this paper

More papers in CEPR Discussion Papers from Centre for Economic Policy Research 33 Great Sutton Street, London EC1V 0DX, UK.
Bibliographic data for series maintained by CEPR ().