Abstract

http://ssrn.com/abstract=1751418
 


 



Sources of Corporate Profits in India - Business Dynamism or Advantages of Entrenchment?


Ashoka Mody


International Monetary Fund (IMF) - Research Department

Anusha Nath


Boston University

Michael Walton


Harvard University - Harvard Kennedy School (HKS)

Janurary 2011

IMF Working Paper No. 11/8

Abstract:     
Some see India’s corporate sector as the fundamental driver of recent and future prosperity. Others see it as a source of excessive market power, personal enrichment, and influence over the State, with an ultimately distorting influence. To inform this debate, this paper analyses the correlates of profitability of firms listed on the Bombay Stock Exchange, covering a dynamic period-in terms of firm entry and growth-from the early 1990s to the late 2000s. Overall, the results do not provide support for the systematic exercise of market power via the product market. At least for this period, the story is more consistent with a competitive and dynamic business sector, despite the continued dominance of business houses and public sector firms in terms of sales and assets. Those with opposing views can, with justification, argue that our analysis does not cover influences, such as corporate governance and state-corporate relations, which may paint a less flattering picture of the corporate sector’s role. Those broader themes deserve further attention.

Number of Pages in PDF File: 40

Keywords: Competition, Corporate sector, Economic models, India, Profits

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Date posted: February 1, 2011  

Suggested Citation

Mody, Ashoka and Nath, Anusha and Walton, Michael, Sources of Corporate Profits in India - Business Dynamism or Advantages of Entrenchment? (Janurary 2011). IMF Working Papers, Vol. , pp. 1-39, 2011. Available at SSRN: http://ssrn.com/abstract=1751418

Contact Information

Ashoka Mody (Contact Author)
International Monetary Fund (IMF) - Research Department ( email )
700 19th Street NW
Washington, DC 20431
United States
202-623-9617 (Phone)
202-589-9617 (Fax)
HOME PAGE: http://www.amody.com
Anusha Nath
Boston University ( email )
595 Commonwealth Avenue
Boston, MA 02215
United States
Michael Walton
Harvard University - Harvard Kennedy School (HKS) ( email )
79 John F. Kennedy Street
Cambridge, MA 02138
United States
617-496-4562 (Phone)
617-496-5747 (Fax)
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