Papers by Sushanta Mallick
Edward Elgar Publishing eBooks, Jul 30, 2009
Oxford Bulletin of Economics and Statistics
BIS Working Papers are written by members of the Monetary and Economic Department of the Bank for... more BIS Working Papers are written by members of the Monetary and Economic Department of the Bank for International Settlements, and from time to time by other economists, and are published by the Bank. The papers are on subjects of topical interest and are technical in character. The views expressed in them are those of their authors and not necessarily the views of the BIS. This publication is available on the BIS website (www.bis.org).
Journal of Post Keynesian Economics
World Development
The 'conditionality hypothesis' proposed by Burnside and Dollar (2000) suggests that aid is only ... more The 'conditionality hypothesis' proposed by Burnside and Dollar (2000) suggests that aid is only effective in augmenting growth in the presence of a sound policy environment. This hypothesis was so influential that its policy recommendation, to provide aid conditional upon recipient domestic policies, is currently the dominant ODA allocation criterion. However non-economic dimensions of development (political and institutional) are increasingly seen as fundamental. For this reason, this paper focuses on the relationship between repression and corruption, and argues that the measurement and monitoring of human rights provision in particular, is a useful tool in gauging the likely effectiveness of aid, based on the finding that countries with better human rights performance experience positive growth, reflecting stronger governance.
Sustaining High Growth in India
Research Papers in Economics, 2015
This paper investigates a perception in the political debates as to what extent poor countries ar... more This paper investigates a perception in the political debates as to what extent poor countries are affected by price movements in the global commodity markets. To test this perception, we use the case of India to establish in a standard SVAR model that global food prices influence aggregate prices and food prices in India. To further analyze these empirical results, we specify a small open economy New-Keynesian model including oil and food prices and estimate it using observed data over the period from 1996Q2 to 2013Q2 by applying Bayesian estimation techniques.
Research Papers in Economics, 2019
Financial reforms have been found to be highly important in promoting aggregate productivity. Yet... more Financial reforms have been found to be highly important in promoting aggregate productivity. Yet, the linkage between access to finance, firm-level productivity, and exporting performance has been overlooked in the literature. We fill this gap using a rich dataset of 11,612 Indian firms over the period 1988-2014 to study the impact of a unique financial policy intervention on firm performance. We document a significant effect of capital-account liberalization through the lens of an export-oriented policy initiative on firms’ productivity and consequently on their exporting activity. Finally, the beneficial effect of the policy change is more pronounced for financially vulnerable firms, as measured by high debt dependence and low levels of liquidity.
This paper estimates the causal effect of a unique programme of corporate debt restructuring (CDR... more This paper estimates the causal effect of a unique programme of corporate debt restructuring (CDR) on stability of Indian banks over the period 1992-2012. The banks who participated in the programme were extended regulatory forbearance on asset classification and provisioning on the restructured corporate loans. We find that banking stability of the participated banks increases substantially after the implementation of the programme. Using stochastic frontier analysis approach, we estimate two variant measures of market power and investigate the interactive effect of CDR on bank stability. The result shows that the positive effect of CDR on stability declines at higher level of market power, implying that the CDR mechanism is less effective for the participating banks beyond a threshold level of market power. We also find that the second phase of deregulation and the direct effect of market power have significant positive effect on the overall soundness of Indian banks. To provide u...
Given the decline in growth momentum in the manufacturing sector in many OECD countries, the role... more Given the decline in growth momentum in the manufacturing sector in many OECD countries, the role of knowledge-based capital has emerged as a key driver for sustained growth. While empirical studies on estimating knowledge spillovers have usually been undertaken at the country level, the spillover effects can be more definitive only if the analysis is conducted at the industry-level. This paper therefore attempts to identify spillovers by disentangling technological innovations into intraand inter-national knowledge innovations at industrylevel in driving per capita output growth. Our main findings are first, that there is evidence for a robust positive relationship between R&D and output growth. Second, industries with greater innovation . .
This paper outlines the Fund-Bank analytical frameworks and presents a critical appraisal indicat... more This paper outlines the Fund-Bank analytical frameworks and presents a critical appraisal indicating the importance of both demand and supply constraints in the countries undertaking Fund adjustment programs, given that these economies are operating much below their capacity output. The paper attempts to provide an integrated model of poverty reduction by invoking the notion of consumption deprivation as a measure of poverty, while addressing growth-oriented macroeconomic adjustment. A strategy to investment in infrastructure and in human development, particularly in the rural areas to encourage or ‘crowd in’ private investment is a precondition of growth and poverty alleviation. The integrated model also verifies that continued growth and falling debt-exports ratio would keep the debt dynamics stable, and thereby help reduce poverty.
Using a rich dataset of 11,612 Indian firms over the period 1988-2014 and a difference-indifferen... more Using a rich dataset of 11,612 Indian firms over the period 1988-2014 and a difference-indifferences approach, we analyse the impact of the export-oriented policy initiative, namely foreign exchange management act (FEMA) on firms’ exporting activity. The results show that firms who benefited from this initiative have higher export intensity compared to matched exporting firms with only domestic sources of financing. Further, our results suggest that this effect is particularly stronger for firms that receive extra incentives in the form of government grants and subsidies including export incentives and duty drawbacks. Finally, we find that when financially constrained firms and those firms operating in vulnerable industries gain access to foreign financing, they are able to increase their export participation. Overall, easing controls on trade financing is more responsive for those firms that are smaller in size, have higher output volatility, higher import intensity, and operate in...
SSRN Electronic Journal, 2020
Given the ongoing efforts to close the gender pay gap across different sectors in the UK, this pa... more Given the ongoing efforts to close the gender pay gap across different sectors in the UK, this paper investigates the impact of a pay transparency initiative on the gender pay gap in the university sector, focusing on the Russell Group of top-tier universities. The initiative, introduced in 2007, enabled public access to mean salaries of men and women in UK universities. Using a rich individual-level administrative dataset and a difference-indifferences approach comparing men and women, we document several key findings. First, following the pay transparency intervention, the log of salaries of female academics increased by around 0.62 percentage points compared to male counterparts, reducing the gender pay gap by 4.37%. The effect is more pronounced considering a balanced sample (1.27 percentage points increase in female wages or an 11.59% fall in the gender pay gap). This fall in the pay gap is mostly driven by senior female academics negotiating higher wages and female academics moving to universities with equal opportunity. We do not find any evidence of pre-existing wage gap or the gender composition associated with the fall in the gender pay gap.
Annals of Operations Research, 2021
The COVID-19 pandemic has given rise to a spike in financial market volatility. In this paper, we... more The COVID-19 pandemic has given rise to a spike in financial market volatility. In this paper, we attempt to assess the effects of financial & news-driven uncertainty shocks in growing Asian economies, using country-specific bond volatility shocks as a measure of local interest rate uncertainty. Also, we contrast the effects of local uncertainty with global stock market uncertainty. Using bond market data from nine Asian markets, we uncover a transmission mechanism of uncertainty shocks via the bond market. The mechanism works as a crowdingout effect due to government-led excessive market borrowing with supply-side consequences for the private sector, as opposed to economic policy or global stock market uncertainty which works more like a demand shock as in the literature. We conclude that countries with growing fiscal deficits that entail a larger government bond market or higher current account deficits, tend to experience an increase in the cost of borrowing due to this bond market volatility or interest rate uncertainty shocks.
International Review of Financial Analysis, 2021
Journal of Income Distribution®, 2008
This article conceives poverty in terms of the consumption of essential food, makes use of a new ... more This article conceives poverty in terms of the consumption of essential food, makes use of a new deprivation (or poverty) function, and examines the effects of changes in the mean and the variance of the income distribution on poverty, assuming a log-normal income distribution. The presence of a saturation level of consumption can be treated as a poverty-line threshold as opposed to an exogenous income-based poverty line. Within such a consumption deprivation approach, the article proves analytically that rising mean income reduces poverty while rising variance of income distribution increases poverty.
Journal of Economic Behavior & Organization, 2020
In times of crisis, innovation and entrepreneurship can be considered as a path out of valuation ... more In times of crisis, innovation and entrepreneurship can be considered as a path out of valuation uncertainty of firms. All types of innovation output, however, may not have a similar impact across different firm size and sectors during bad times. Specifically, financially less-constrained (high leverage) innovative firms could be valued higher or experience less uncertainty in their performance. By considering the innovation intensity and leverage in pre-and post-2008 financial crisis periods, and using firm-level quarterly data from listed firms in the UK during 20 0 0-2014, we find that leveraged firms can achieve greater valuation and mitigate any valuation uncertainty in the post-crisis period if they are knowledgeor high-technology intensive. In terms of size effect, although leverage distorts market valuation of large UK firms, the impact is positive for SMEs that are innovation intensive. Finally, in terms of sectoral effect, firms within manufacturing and services with leverage have benefitted from R&D and patenting activities during the post-crisis period, but not in the pre-crisis period. This also gets revealed when we classify all firms into high-tech and low-tech sectors, implying that firms in the high-tech sectors with debt dependence have benefitted favorably in terms of higher valuation and lower uncertainty in the post-crisis period, not firms in the low-technology sectors, reflecting further the role of technological intensity in firm valuation.
Economic Theory, 2021
This study explores the dynamic effects of patent policy on innovation and income inequality in a... more This study explores the dynamic effects of patent policy on innovation and income inequality in a Schumpeterian growth model with endogenous market structure and heterogeneous households. We find that strengthening patent protection has a positive effect on economic growth and a positive or an inverted-U effect on income inequality when the number of differentiated products is fixed in the short run. However, when the number of products adjusts endogenously, the effects of patent protection on growth and inequality become negative in the long run. We also calibrate the model to US data to perform a quantitative analysis and find that the long-run negative effect of patent policy on inequality is much larger than its short-run positive effect. This result remains consistent with our empirical finding from a panel vector autoregression.
Journal of Corporate Finance, 2021
Growing financial failure at firm-level can have serious consequences for banks in terms of risin... more Growing financial failure at firm-level can have serious consequences for banks in terms of rising non-performing assets, in the absence of a strong bankruptcy system. Such a scenario in India made its dysfunctional insolvency system to be reformed, introducing the new Insolvency and Bankruptcy Code (IBC) in 2016. Using a panel of 33,845 Indian firms over the period of 2008-2019 and by employing a difference-indifferences approach, we investigate how the IBC has supported financially distressed firms in mitigating their intrinsic vulnerability during the post-IBC period, compared to their non-distressed counterparts. We find that through expanded credit availability and lower cost of debt financing during the post-IBC period, distressed firms are able to improve their performance relative to non-distressed firms. Furthermore, we provide evidence that the benefits stemming from the implementation of the IBC policy are more prominent for those financially distressed firms that are larger, younger and more collateralized. Our results are robust to a battery of tests and identification strategies. Our conclusions are relevant in contributing to the current academic and policy debates on safeguarding and preserving business performance and continuity under stressed scenarios.
Journal of Banking & Finance, 2021
Using an international sample, this paper contributes to the ongoing policy debate on whether gre... more Using an international sample, this paper contributes to the ongoing policy debate on whether greater financial inclusion can help improve bank performance, even in the presence of financial regulation. We, first, document a strong positive association between financial inclusion and bank efficiency, and then show that this association is stronger in countries with limited restrictions on banking activities and more capital regulation stringency. Exploring plausible channels, we find that greater financial inclusion helps banks reduce the volatility of their deposit-funding share, providing more stable long-term funds for banks while also mitigating the negative effects of their return volatility. Exploiting crosscountry and temporal variation in the timing of inclusive financial agenda with hand-collected data on membership of an inclusive policy network of countries to actively promote inclusiveness, we also show, using a difference-indifferences estimator, that an enabling inclusive financial environment has positive impact on bank performance. Thus the significant benefits of inclusive banking have ramifications for enabling regulatory incentives to promote inclusive financial intermediation.
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Papers by Sushanta Mallick