## Does the Business Environment Affect Corporate Investment in India?

_IMF Working Papers, March 1, 2012_

## Source details

**Canonical URL:** [Does the Business Environment Affect Corporate Investment in India?](https://www.imf.org/en/publications/wp/issues/2016/12/31/does-the-business-environment-affect-corporate-investment-in-india-25762)

## Other formats

- [Markdown version](/en/publications/wp/issues/2016/12/31/does-the-business-environment-affect-corporate-investment-in-india-25762/index.md)
- [Structured JSON version](/en/publications/wp/issues/2016/12/31/does-the-business-environment-affect-corporate-investment-in-india-25762/index.json)
- [Bundle manifest](/en/publications/wp/issues/2016/12/31/does-the-business-environment-affect-corporate-investment-in-india-25762/bundle-manifest.json)

## Bibliographic details
- Authors: Kiichi Tokuoka
- Published: March 1, 2012
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781463939069.001

---

### Summary and context
- Since the global financial crisis, corporate investment has been weak in India.
- Sluggish corporate investment would not only moderate growth from the demand side but also constrain growth from the supply side over time.
- The paper analyzes reasons for the slowdown and discusses how India can boost corporate investment using both macro and firm-level micro data.

### Major findings — macro data analysis
- Macroeconomic factors can largely explain corporate investment.
- Macroeconomic factors do not appear to account fully for recent weak performance.
- The incomplete explanatory power of macro factors suggests a key role for the business environment in reviving corporate investment.

### Major findings — micro (firm-level panel) data analysis
- Improving the business environment could stimulate corporate investment.
- Specific micro-level channels identified:
  - Reducing costs of doing business.
  - Improving financial access.
  - Developing infrastructure.

### Policy implications and recommendations
- Focus on reforms that lower firms’ operating costs to encourage investment.
- Enhance financial access for firms to reduce financing frictions and support investment.
- Prioritize infrastructure development to alleviate constraints on firm-level investment decisions.

### Key metadata cited in the source
- Author: Kiichi Tokuoka
- Publication date: March 1, 2012
- Series: Working Paper No. 2012/070
- Pages: 22
- DOI: https://doi.org/10.5089/9781463939069.001

*Kiichi Tokuoka. "Does the Business Environment Affect Corporate Investment in India?", IMF Working Papers 2012, 070 (2012), March 1, 2012.*

---

## Content in this bundle

- **_wp1270 - References**
  - [_wp1270 - References (Markdown version)](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2012/_wp1270.pdf.md){rel="alternate" type="text/markdown"}
  - [_wp1270 - References (PDF)](/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/wp/2012/_wp1270.pdf){rel="external" type="application/pdf"}

---

_Source: https://www.imf.org/en/publications/wp/issues/2016/12/31/does-the-business-environment-affect-corporate-investment-in-india-25762_