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Modelling Growth in Indian MSMEs: An Empirical Approach Using Fixed Effects and GMM Estimator

Year: 2025

Type: article

Abstract: Using econometric techniques, this paper investigates the determinants of growth in Micro, Small, and Medium Enterprises (MSMEs) in India. Using a balanced panel dataset of 560 fast-growing Indian MSMEs from 2014–2018, the study employs Fixed Effects (FE) estimation and the Generalized Method of Moments (GMM) to model the relationship between firm growth and various firm-specific and macroeconomic variables. According to the report, macroeconomic factors like inflation and the corporate tax rate, productivity metrics, business size, and internal financing all greatly impact MSME growth. On the other hand, there was little to no statistical relevance between leverage and GDP growth. The results provide policy implications for focused interventions in emerging economies and advance our understanding of the fundamental dynamics of MSME development.

Source: International Journal of Economics and Management Studies

DOI: 10.14445/23939125/ijems-v12i5p101

Authors: Rohit Ashok Mohite, Ravi Harendra Chourasiya

Institution: Savitribai Phule Pune University

Language: English

Topic: Firm Innovation and Growth

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDG: Decent work and economic growth

Open Access status: hybrid

OpenAlex ID: W4411242084