Change search
CiteExportLink to record
Permanent link

Direct link
Cite
Citation style
  • apa
  • harvard1
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf
Promarket reforms and allocation of capital in India
Jönköping University, Jönköping International Business School, JIBS, Economics.
Jönköping University, Jönköping International Business School, JIBS, Economics. (CESIS)
University of Missouri Kansas City. (Max Planck Institute of Economics)
2009 (English)Report (Other academic)
Abstract [en]

The government of India initiated pro-market reforms in the 1990s, after almost five decades of socialist planning. These and subsequent policy reforms are credited as the drivers of India’s radical economic transformation. Prior to reforms, private investment was strictly regulated and restricted to limited sectors. There have since been numerous changes in sectors important for investment, such as the bank sector, which affects outcomes of firm-level strategic decision making and investment behavior. By most estimates, India’s economy will continue to grow rapidly. The purpose of this paper is to investigate changes in investment behavior from the introduction of reforms to current conditions. Reforms changed several institutional frameworks for firm operations, allowing firms to pursue more competitive strategies. Given the importance of ownership in determining firm efficiency and access to capital, we examine the effect of ownership type, and also control for industry differences in capital allocation. We compute a measure of investment efficiency derived from the accelerator principle: Elasticity of capital with respect to output. We find that the allocation of capital has been slow to respond to reforms, indicating similar pace of firm responses. The findings suggest that firms face significant costs in adjusting their capital stock, which in turn leads to inefficient capital allocation. Surprisingly, we find no significant improvement over the 1991-2006 time period.

Place, publisher, year, edition, pages
Stockholm, 2009. , 28 p.
Series
Centre of Excellence for Science and Innovation Studies Working Paper, 206
Keyword [en]
Allocation of capital, India, institutional reforms, ownership
National Category
Economics
Identifiers
URN: urn:nbn:se:hj:diva-11351OAI: oai:DiVA.org:hj-11351DiVA: diva2:287591
Note
Working Paper, CESISAvailable from: 2010-01-19 Created: 2010-01-19 Last updated: 2012-06-05Bibliographically approved
In thesis
1. Corporate governance, legal origin and firm performance: an Asian perspective
Open this publication in new window or tab >>Corporate governance, legal origin and firm performance: an Asian perspective
2012 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

This dissertation deals with corporate governance, legal origin and firm performance with a focus mainly on Asia. The dissertation consists of four individual papers and an introductory chapter. All papers can be read individually but share a common theme in corporate governance and investments. The main region of interest is Asia due to its special characteristics of ownership structures and governance. However, comparative studies of Asia and Europe as well as global outlooks are included in the dissertation too. The papers contribute to research by studying effects on investment performance, firm performance, capital allocation and capital structure from legal traditions, institutional indicators and ownership type.

The first paper focuses on family ownership which is found to affect firm performance negatively when using measures of firm valuation and returns, but investment performance positively when measured by marginal q. This suggest that family owned firms may be better at avoiding bad investments but at the same time have lower market valuation and returns to capital compared to firms with other owners.

The second paper investigates investment performance and firm size in terms of number of employees in 58 countries around the world. It is found that initial increase of staff size tend to positively affect investment performance overall, but excessive employment has a negative impact on investment performance.

The third paper studies the capital allocation in India after their economic reforms in the 1990s. It is found that allocation of capital has been slow to respond to reforms and firms face significant costs in adjusting their capital stock, leading to inefficient capital allocation.

The fourth paper deals with firm capital structure in 24 Asian and European countries. Both financial market indicators of maturity and firm specific characteristics influence the leverage of firms. Financial market maturity measures have a negative effect on debt levels as do family ownership of firms.

Place, publisher, year, edition, pages
Jönköping: Jönköping International Business School, 2012. 147 p.
Series
JIBS Dissertation Series, ISSN 1403-0470 ; 079
National Category
Economics
Identifiers
urn:nbn:se:hj:diva-18176 (URN)978-91-86345-31-0 (ISBN)
Public defence
2012-06-08, B1014, Gjuterigatan 5, Jönköping, 10:00 (English)
Opponent
Supervisors
Available from: 2012-06-05 Created: 2012-05-30 Last updated: 2012-06-08Bibliographically approved

Open Access in DiVA

fulltext(186 kB)423 downloads
File information
File name FULLTEXT01.pdfFile size 186 kBChecksum SHA-512
146b329fde3551b45ba814ccf54069c2895c038da071afed10b7cb1f292ddf52615f4e4154fef4f0f42625f0824e9b01913dbe34f9e4109a8819f482d597b34a
Type fulltextMimetype application/pdf

Search in DiVA

By author/editor
Högberg, AndreasEklund, Johan E.
By organisation
JIBS, Economics
Economics

Search outside of DiVA

GoogleGoogle Scholar
Total: 423 downloads
The number of downloads is the sum of all downloads of full texts. It may include eg previous versions that are now no longer available

Total: 385 hits
CiteExportLink to record
Permanent link

Direct link
Cite
Citation style
  • apa
  • harvard1
  • ieee
  • modern-language-association-8th-edition
  • vancouver
  • Other style
More styles
Language
  • de-DE
  • en-GB
  • en-US
  • fi-FI
  • nn-NO
  • nn-NB
  • sv-SE
  • Other locale
More languages
Output format
  • html
  • text
  • asciidoc
  • rtf