A Survey on Corporate Investment Practices in Nepal

Abstract

Investment and capital accumulation have traditionally been accorded a prime place in the development literature. Over the last couple of decades, economic liberalization and deregulation policies have been widely adopted by developing countries that assign a central role to the private sector. The emphasis on the private sector as the engine of economic growth and development has brought the focus on the behavior of private investment in developing countries. This paper attempts to explore and describe the behavior of private investment in Nepal especially with reference to the role of financial factors. The survey result shows that retained earnings and bank loan are the preferred sources of funds to finance their new projects. The result also indicates that the major factors causal to the limitations of fixed investment in Nepal were identified as the finance and labor related problems.

Keywords: fixed investment, capital market, financing constraint, private investment