Nation of Beancounters

Crowding in investment in India

Posted in Indian Variables by Navin Kumar on March 28, 2012

…if per capita developmental expenditure rises by 1%, investment can go up by 0.37 to 0.63%

From Mitra and Ural’s excellent paper Indian Manufacturing: A Slow Sector in a Rapidly Growing Economy. They look at the impact of reducing protection, inflexible labour markets and state developmental expenditure on things like productivity, employment and investment. It also contains the line:

Investment is about 40 to 80% higher in a flexible labour market state as compared to a similar state with a rigid labour market.

*expenditure by state governments on health, education, infrastructure etc

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: