Analyzing the constraints to private investment in manufacturing industry
Keywords:
Industry, constraint, investmentAbstract
This paper identifiesthe main impediments to investment and industrial productivity, which have ledto a decline in growth. This is done by analyzing the impediments andconstraints to productivity and investment using the World Bank’s 2007Investment Climate Assessment (ICA) data at the seven of level main industrialzones. An inadequate workforce, access to raw materials, and corruption wereranked third, fourth, and fifth, respectively. Will a market economy alwayssupply funds for profitable investment projects?The answer to this question isimportant for policy makers seeking economic efficiency at the micro level, andfor our understanding of the business cycle at the macro level. The purpose ofthis paper is to investigate the presence and the economic importance of creditmarket imperfections within a structural model of firm investment.
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