Papers by Debabrata Datta
Paradigm, 2012
We express our regret that publication of June, 2012 issue is delayed. Efforts are on to make the... more We express our regret that publication of June, 2012 issue is delayed. Efforts are on to make the pub I ication of Paradigm regular and to clear the backlog at the earliest. Like our earlier issues this issue of Paradigm focuses on variety of topics in various fields of management. All the papers display serious research effort. The editorial board of Paradigm thanks the authors for choosing Paradigm as a forum to put forward their valuable work. Government accountability and transparency are major issue nowadays. Government websites are an important instrument in the hands of the government to make the democracy more participative. Mo ha I ik's paper suggests a measure to rank the Government web sites with a new approach .
Paradigm, 2014
The study of the determinants of the capital structure of Indian firms assumes significance since... more The study of the determinants of the capital structure of Indian firms assumes significance since it deals with the pattern of financing of corporate investments. Over the last 15 years, the Indian economy experienced three different phases of economic growth, viz. 1998–2002, 2003–2007 and 2008–2012. Our study shows that firms relied more on debt financing during the bear phase of 1998–2002 but shifted towards increased equity financing in the bullish period of 2003–2007. The leverage of firms in a year declined in response to increased profit of the earlier year and this behaviour implied debt aversion. The increased financing of investments by corporate savings during 2003–2007 boosted up India’s growth rate. The post-meltdown period of 2008–2012, however, witnessed fall in corporate savings and investments and the accumulation of excess speculative liquidity.
Arthaniti, 2003
Abstnct In a non-discriminatory environment, a principal hires an agent for a specified period. T... more Abstnct In a non-discriminatory environment, a principal hires an agent for a specified period. The true skill of the agent is unknown to the principal but can be learned through informative signals. The precision of such signals depends positively on the level of scrutiny, undertaken by the principal and full scrutiny reveals the truth. The skill determines the future productivity and its knowledge is essential for the principal to decide upon whether to re-employ the agent or not, once the initial contract terminates. We show that full scrutiny is sub-optimal and hurts the principal. It is in the best interest of the principal to opt for significantly low levels of scrutiny during the probation even if the scrutiny is costless. JEL Classification: C7, DB, J3.
Arthaniti: Journal of Economic Theory and Practice, 2020
Self-help groups (SHGs) are set up by the National Bank for Agriculture and Rural Development (NA... more Self-help groups (SHGs) are set up by the National Bank for Agriculture and Rural Development (NABARD) with the objective of supporting poor people of India to set up micro enterprises. However, it is not at all easy to become an entrepreneur. The empirical observation shows that while some members of SHGs succeed in becoming entrepreneurs, other continue to remain just members. This article tries to identify the factors that help this entrepreneurship. It first develops a theoretical model and then carries out an empirical exercise with the help of ground-level surveys of SHGs in several districts of West Bengal. This empirical exercise with the help of logistic regression finds out that state help, financial access and existence of marketing opportunity are necessary for entrepreneurial success. Contrary to the general belief, more years of education does not help entrepreneurship. More revealing is the finding that protective social support deters entrepreneurship.
Abstract Legal disputes have stymied the progressof the Indian telecom industry. This paperuses a... more Abstract Legal disputes have stymied the progressof the Indian telecom industry. This paperuses a contest theory model, where legalbattles are a form of contest, to show thatthere can be equilibrium without legalbattle. But this needs the policy makers tohave dispute management as a prime areaof focus. In that context the paper suggestssuitable policy design against the backdropof major telecom disputes. Subhasish M Chowdhury University of East Anglia Debabrata Datta Institute of Management Technology, Ghaziabad T he privatisation of the telecom industry, the advent of cellulartelephony and the concomitant scarcity of spectrum haveburdened governments worldwide with the task of allocatingthe scarce spectrum among incumbent firms and potential entrants.These developments also throw open a challenge to economicresearchers—that of modelling a market where firms compete, subjectto availability of a scarce natural resource allocated by the government.Given that spectrum is in short supply and acquiring a larger share ofthe spectrum means more profit, it can be concluded that there will beconflict over spectrum acquisition and firms will engage in rent seekingactivities. Unless the government (or the appointed regulating body)manages this task of spectrum distribution and regulation efficiently,disputes will surface and firms are likely to take recourse to legal redressalprocedures. What the nature of equilibrium will be in this kind of marketis an open question. In this paper we address this issue, using the Indiantelecom industry as a case study.Before 1984, the telecom sector in India was operated exclusively bythe government. In 1985 the Department of Telecommunications (DoT)was created as a separate department to serve as the primary policy-maker and regulator for the telecom industry. The telecom sector wasopened to private firms in 1991 to bring in value added teleservicesother than fixed telephony. The Government of India released the National
DESCRIPTION IIFT Working Paper Series. Abstract The paper investigates the prospect of 3G rollout... more DESCRIPTION IIFT Working Paper Series. Abstract The paper investigates the prospect of 3G rollout in India with the help of an empirical analysis of a survey on a random sample of 400 mobile phone customers in Kolkata. The study applies structural equation modeling and explores the adoption intention of this new facility among the respondents. It is found out that presence of low cost alternatives plays a significant hurdle for success of 3G services. This research reveals that perceived expense, an established inhibitor of technology adoption has no significant influence on adoption behavior here. The study further shows that the mobility factor, considered to be a prime motivator of 3G use is not found to be statistically significant.
Artha Vijnana: Journal of The Gokhale Institute of Politics and Economics
Economists differ in their theoretical conclusions over the relation between fiscal deficit and i... more Economists differ in their theoretical conclusions over the relation between fiscal deficit and interest rate. The empirical studies in different countries have also produced varied results. As high fiscal deficit is a characteristic feature of the Indian economy, different econometric studies have been done to search for causal relation between India'sfiscal deficit and interest rate but Ihe conclusions derived are divergent. Our paper also enquires into the statistical relation between these two variables. It follows the methodology of unit root and reintegration tests using quarterly data up to recent period (2003). The paper finds that the fiscal deficit and interest rate do not appear to. be connected in the context of Indian economy during the period of study. Moreover, the non-existence of the relation cannot be attributed to expansion ill either money supply or savings, considered separately. However, macro variables like interest rate, GDP, money supply are found to be linked in an integrated framework combining real and monetary sectors of the economy. Another important finding of the study is non-stationarity of fiscal deficit. This result brings to the fore the issue of sustainability of country's fiscal deficit in the long-run.
South Asian Journal of Macroeconomics and Public Finance
ABSTRACT The article first looks at the working of an open economy under a situation of price fle... more ABSTRACT The article first looks at the working of an open economy under a situation of price flexibility in a static framework. This extends the Mundell–Fleming model and shows the effect of exchange rate movement in a richer perspective. The article then introduces the role of depreciation of domestic currency in increasing cost of production by increase in the cost of imported inputs and shows the possibility of multiple equilibria. This could lead to the emergence of an economic crisis in a country that is dependent on critical imported input and also suffering from current account deficit. If the outstanding loan amount of this economy is also large, the chances of a crisis are extremely high and policymakers should introduce measures with all earnestness to set right the situation. The article then considers a dynamic version of the macroeconomic model and shows a variety of equilibria. Although the usual case is one of global stability, there may be saddle point stability as well in several cases where (a) depreciation of currency increases price substantially and (b) confidence of the economy is low. But the most critical case could be one under current account deficit when foreign exchange reserves start declining. Here there is saddle point instability and if the confidence level of the economy is low, the economy could be prone to crisis. The article concludes that the Indian economy, in its current state, is exhibiting similar characteristics.
Studies in Microeconomics
If all potential buyers participate in a first-price auction, then (theoretically) the auction pr... more If all potential buyers participate in a first-price auction, then (theoretically) the auction price weakly exceeds the price placed by the seller under a posted price mechanism. However, it is documented that in online sales sellers prefer posted price mechanism to auction. We aim to explain this empirical contradiction in terms of partial participation of the buyers in auction, prompted by impatience and dissuasion. Auction on Internet often requires waiting, and hence, many impatient participants may not join the auction process. Furthermore, a previous experience of failure in auction may also prompt buyers’ non-participation. We show, theoretically, that in the case of partial participation, the price in auction may be lower; posted price turns out to be payoff dominant for both the buyers and the sellers. We then run a laboratory experiment and verify the presence of impatience (through waiting cost) and dissuasion factor (through previous failure) among the subjects.
Economic and Political Weekly, Oct 30, 2010
The Manchester School, Mar 1, 2008
ABSTRACT Two firms sell a homogeneous product to two buyers who differ significantly in their val... more ABSTRACT Two firms sell a homogeneous product to two buyers who differ significantly in their valuation of the good and are allowed to charge (possibly) multiple two-part tariffs. Firms decide upon optimal prices and the choice of sales technologies which help acquire revenues from nonlinear prices. There is a subgame-perfect equilibrium where firms choose different sales technologies and the firm with an advanced sales technology emerges to be a price leader, charging a two-part tariff and selling only to the low-valuation buyers. Consequently, the firm with the less advanced sales technology follows, charges only a fixed fee and serves the high-valuation buyers and always earns strictly higher profits than its leader. Social surplus may deteriorate with competition. Copyright © 2008 The Authors.
Economic and Political Weekly, Jul 23, 2005
The purpose of the paper is to evaluate the efficiency of existing dividend distribution tax in I... more The purpose of the paper is to evaluate the efficiency of existing dividend distribution tax in India from the perspective of investors' preference pattern, as revealed in the market. For this purpose it investigates into the announcement effect of dividend in India in the light of unique dividend distribution tax imposed on firms at the time of dividend distribution with specific legislative intent of discouraging distribution of dividend. The paper has used data set of large profitable firms, which hardly require dividend to signal future prospects. Indian firms are generally found to be conservative in their dividend payout policy relative to the firms listed in other major stock exchanges. The paper presents a theoretical model on agency cost and its implications on dividend distribution Empirical results show that despite firm level tax, higher dividend payout announcement leads to significant rise in share price and lower dividend payout announcement has the opposite impac...
The paper analyzes the reasons behind persistent bilateral trade deficit of Bangladesh with India... more The paper analyzes the reasons behind persistent bilateral trade deficit of Bangladesh with India. It finds that the Bangladesh has export similarity with India and hence faces high export competitiveness. The lack of match between Bangladesh export and Indian import also generates a constraint of complementarity. The paper uses different trade-related indices like RCA and Cosine measures to examine the
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Papers by Debabrata Datta