IES Management College And Research Centre

The Impact of Public Investment on Private Investment: Evidence from India (Record no. 50067)

MARC details
000 -LEADER
fixed length control field 03010nam a2200205 4500
003 - CONTROL NUMBER IDENTIFIER
control field OSt
005 - DATE AND TIME OF LATEST TRANSACTION
control field 20180627171335.0
008 - FIXED-LENGTH DATA ELEMENTS--GENERAL INFORMATION
fixed length control field 180627b ||||| |||| 00| 0 eng d
100 ## - MAIN ENTRY--PERSONAL NAME
Personal name Dash, Pradyumna
9 (RLIN) 31964
245 ## - TITLE STATEMENT
Title The Impact of Public Investment on Private Investment: Evidence from India
300 ## - PHYSICAL DESCRIPTION
Extent 288-307 p.
520 ## - SUMMARY, ETC.
Summary, etc This paper estimates the impact of public investment on private investment in India during 1970-2013 using ARDL procedure developed by Pesaran and Shin (1999) and Pesaran, Shin, and Smith (2001) by incorporating endogenously determined structural break in the model. The base line result implies that a 1 per cent increase in public investment as a ratio to GDP leads to 0.81 per cent and 0.53 per cent decrease in private investment as a ratio to GDP in the long run (about 4 to 5 years) and short run (about 2 to 3 years), respectively, after controlling for economic conditions. To address the concern that the results may be driven by government consumption expenditure, fiscal deficit, or inadequate infrastructure, the analysis was repeated by estimating the investment function after including these variables and similar results were obtained. The investment regression was also estimated for a shorter sample period (1978–2013) to get the same result.<br/><br/>It is observed that the crowding out effect of public investment on private investment has dampened during the post-liberalization period. The results also reveal that a “market friendly” incumbent and an increase in foreign direct investment dampen the magnitude of the crowding out effect of public investment. Formal tests were conducted to examine whether the crowding out effect was driven by political uncertainty and political business cycle channels but no evidence for the same is found.<br/><br/>The results also reveal that public infrastructure (represented by kms of roads per capita) has a positive effect on private investment in the short run. This is similar to the findings by Blejer and Khan (1984) that while public infrastructure investment is complementary to private investment, other kinds of public investment lead to crowding out of private investment. This suggests that public investment should be more focused on goods and services which are enjoyed or consumed by many consumers simultaneously and non-excludable in nature with significant positive externalities.<br/><br/>In this model, a single endogenously determined structural break was included and the possibility of multiple breaks was excluded. There is a scope to increase multiple structural breaks and re-investigate the impact of public investment on private investment in India in future studies.
653 ## - INDEX TERM--UNCONTROLLED
Uncontrolled term Public Investment,
Uncontrolled term Private Investment,
Uncontrolled term Crowding Out Effect
Uncontrolled term ARDL Procedure
Uncontrolled term Structural Break
773 0# - HOST ITEM ENTRY
Host Biblionumber 49839
Host Itemnumber 62467
Main entry heading Chand,Vijaya Sherry
Place, publisher, and date of publication Ahmedabad Indian Institute of Management
Other item identifier 5556814
Title Vikalpa Vol . 41
International Standard Book Number 0256-0909
942 ## - ADDED ENTRY ELEMENTS (KOHA)
Source of classification or shelving scheme Dewey Decimal Classification
Koha item type Journal Article
Holdings
Withdrawn status Lost status Source of classification or shelving scheme Damaged status Not for loan Home library Current library Date acquired Total Checkouts Full call number Barcode Date last seen Price effective from
    Dewey Decimal Classification     Main Library Main Library 27/06/2018   Vol 41, Issue 4/ 5556814JA3 5556814JA3 27/06/2018 27/06/2018

Circulation Timings: Monday to Saturday: 8:30 AM to 9:30 PM | Sundays/Bank Holiday during Examination Period: 10:00 AM to 6:00 PM