skip to main content
Language:
Search Limited to: Search Limited to: Resource type Show Results with: Show Results with: Search type Index

The Decision to Import Capital Goods in India : Firms’ Financial Factors Matter

The World Bank economic review, 2012-01 [Peer Reviewed Journal]

CC BY-NC-ND 3.0 IGO http://creativecommons.org/licenses/by-nc-nd/3.0/igo World Bank ;ISSN: 1564-698X ;EISSN: 1564-698X ;DOI: 10.1093/wber/lhs002

Digital Resources/Online E-Resources

Citations Cited by
  • Title:
    The Decision to Import Capital Goods in India : Firms’ Financial Factors Matter
  • Author: Bas, Maria ; Berthou, Antoine
  • Subjects: assets ; bilateral trade ; consumer preferences ; debt ; econometric analysis ; elasticity ; elasticity of substitution ; fixed costs ; liquidity ; marginal costs ; monopolistic competition ; perfect information ; production function ; productivity ; productivity growth ; total factor productivity ; trade liberalization ; utility function ; wealth
  • Is Part Of: The World Bank economic review, 2012-01
  • Description: Are financial constraints preventing firms from importing capital goods? Sourcing capital goods from foreign countries is costly and requires internal or external financial resources. A simple model of foreign technology adoption shows that credit constraints act as a barrier to importing capital goods under imperfect financial markets. In our study, we investigate this prediction using detailed balance-sheet data from Indian manufacturing firms having reported information on financial statements and imports by type of good over the period 1997–2006. Our empirical findings shed new light on the micro determinants of firms' choices to import capital goods. Baseline estimation results show that firms with a lower leverage and higher liquidity are more likely to source their capital goods from foreign countries. Quantitatively, a 10 percentage point improvement of the leverage or liquidity ratio increases the probability of importing capital goods by 11 percent to 13 percent respectively. Different robustness tests demonstrate that these results are not driven by omitted variable bias related to changes in firm observable characteristics as well as ownership status. These findings are also robust to alternative specifications dealing with the potential reverse causality issues.
  • Publisher: Oxford University Press on behalf of the World Bank
  • Language: English
  • Identifier: ISSN: 1564-698X
    EISSN: 1564-698X
    DOI: 10.1093/wber/lhs002
  • Source: Open Knowledge Repository
Back to results list
INSPIRE LIBRARY - TON DUC THANG UNIVERSITY (84-028) 37 755 057 Feedback
19 Nguyen Huu Tho St. Dist.7, HCM thuvien@tdtu.edu.vn

Copyright © 2017 INSPIRE LIBRARY - TON DUC THANG UNIVERSITY

Searching Remote Databases, Please Wait