Title: Drivers of corporate domestic investment: regional analysis for India

Authors: Ashwani Bishnoi

Addresses: Department of Humanities and Social Sciences, National Institute of Technology Kurukshetra, India

Abstract: Investment analysis at regional level has remained a major thrust area among policymakers for balanced regional development of an economy. This paper assesses the drivers of corporate investment in India using a panel data of 16 states for the period 1999-2017. The study employs generalised method of moments (GMM) estimators and gives more focus on financial condition-based dimension which has been overlooked by the existing literature. The way in which financial conditions affect the firms' investment decision is important for an effective design of monetary policy. Empirical results confirm the roles of various factors with varying magnitude and direction. These factors include, fiscal policy, access of financial resources - be it the bank credit or the internal source of finance, the efficiency components covered through productivity and costs, infrastructural facilities, government effectiveness and financial pressure variables.

Keywords: private investment; infrastructure; financial pressure; panel data; GMM India; India.

DOI: 10.1504/GBER.2021.113121

Global Business and Economics Review, 2021 Vol.24 No.2, pp.147 - 165

Received: 28 Apr 2020
Accepted: 16 Jul 2020
Published online: 19 Feb 2021 *

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