Bijoy Rakshit | Indian Institute of Technology Ropar (original) (raw)

Papers by Bijoy Rakshit

Journal of Economics and Business, 2022

Abstract The study investigates whether changes in bank competition, efficiency, and risk-taking ... more Abstract The study investigates whether changes in bank competition, efficiency, and risk-taking affect the profitability of Indian commercial banks during 1996−2016. While assessing the determinants of profitability, this study considers a wide range of bank-specific, macroeconomic, and institutional factors that explain the variations in bank profitability. Results estimated through the two-step system GMM indicate that a higher level of bank competition deteriorates bank profitability in Indian banking. Regarding risk-taking, results reveal that the growing incidence of credit risk hampers bank profitability for the whole banking industry and across ownerships. However, higher levels of profit and cost efficiency are positively associated with bank performance. Other bank-specific, macroeconomic, and institutional variables appear to have influenced bank profitability in India. The joint effect of competition and efficiency (or risk-taking) has further been examined in this study.

International Social Science Journal, 2021

Abstract South Asia, a sub-region with nearly a third of the world's population living in ext... more Abstract South Asia, a sub-region with nearly a third of the world's population living in extreme poverty and hunger, has been affected by the COVID-19 pandemic in an unprecedented way. The pandemic has undermined the progress achieved by the subregion towards attaining sustainable development goals. This study argues that fostering environmental sustainability in the South Asian region is crucial to ?Building Back Better? while taking cognisance of future climate-related risks. With the low level of preparedness, the collapse of global supply chains, and restrictive regional integration, the individual country in the region lacks the fiscal and technical capacity to implement sustainable development goals effectively. Therefore, based on the analytical approach to regional integration, this paper explores the potential role of regional integration in ensuring environmental sustainability in South Asia. Additionally, this study illustrates how the COVID-19 pandemic has affected several environmental aspects at the regional level, such as clean energy, disaster risk reduction, and waste management, and shows how regional cooperation can address these challenges post pandemic. While previous studies mainly focus on regional integration in the European Union, this study targets the crucial importance of regional cooperation in South Asia in achieving environmental sustainability.

Managerial Finance, 2020

PurposeThe paper measures the degree of bank competition in Indian banking over the period 1996–2... more PurposeThe paper measures the degree of bank competition in Indian banking over the period 1996–2016. Using bank-level annual data, we revisit the case of banking competitiveness during the prefinancial and postfinancial crisis and examine whether the global financial crisis alters the level of bank competition in India. Additionally, this paper addresses the misspecification issues associated with the widely used Panzar–Rosse model in Indian banking context.Design/methodology/approachWe apply Panzar and Rosse (1987) H-statistic and evaluate the degree of bank competition by estimating the extent to which changes in input prices are reflected in revenues earned by banks. Subsequently, we link this measure of competitiveness to a number of structural indicators (HHI and CRn) to examine the structure-conduct-performance hypothesis, which assumes that a concentrated banking system can impair competition. The simple panel regression model was used to handle the empirical estimations.Fin...

Journal of Central Banking Theory and Practice, 2020

The primary purpose of this paper is to empirically investigate the impact of bank competition on... more The primary purpose of this paper is to empirically investigate the impact of bank competition on financial stability in India. We use a dynamic panel model to examine whether an increase in bank competition hindrances financial stability of commercial banks in India over the period 1996 to 2016. Findings reveal that in India, a higher degree of bank competition is positively associated with the prevalence of non-performing loans. Additionally, the positive impact of the Lerner index on Z-score lends support to competition-fragility hypothesis. However, we argue that both the views of competition-stability and competition-fragility can coexist in a single banking system like India.

South Asian Journal of Business Studies, 2019

Purpose Bank competition and financial stability are often cited as important drivers of economic... more Purpose Bank competition and financial stability are often cited as important drivers of economic growth. Bank competition plays a very significant role in enhancing the efficiency and determining the stability of a financial system. However, a question of interest is whether bank competition enhances or hindrances the economic growth of a country. The purpose of this paper is to investigate the role of bank competition and financial stability on economic growth for selected South Asian economies over the period 1997–2016. Design/methodology/approach To investigate whether bank competition enhances or hinders economic growth, the author applies a two-step estimation technique. First, the author estimates bank competition using the Lerner index and adjusted Lerner index and, second, examines the joint effect of bank competition and financial stability on economic growth applying both panel regression model and system GMM techniques. Findings Empirical findings reveal that the banking...

International Journal of the Economics of Business, 2019

This paper measures the degree of bank competition in India using a sample of 70 commercial banks... more This paper measures the degree of bank competition in India using a sample of 70 commercial banks over the period 1996-2016. To assess the degree of competition, we estimate the market power of each bank in our sample employing three nonstructural measures: the Lerner index, the adjusted Lerner index, and the Boone indicator. Bank-wise and year-wise estimates of the marginal cost required in all these measures are obtained using the semi-parametric method. The paper further attempts to undertake a comprehensive assessment of competition in Indian banking and identifies various bank-specific, macroeconomic, structural, and contestability indicators, which are supposed to explain level and variation of the degree of competition over time. Empirical findings reveal that public-sector banks in India exercise a relatively higher degree of bank competition compared to private and foreign-sector banks. However, aggregate results support that the Indian banking system is competitive in general. Unlike the structure-conduct-performance paradigm, which advocates that a concentrated banking system impairs competitiveness, our findings reveal that concentration measures hardly exert any effect on bank competition. Rather, contestability measures play a significant role in the determination of bank competition.

Buletin ekonomi moneter dan perbankan, Mar 24, 2022

This paper examines the effects of cost, revenue, profit efficiency, and stability inefficiency o... more This paper examines the effects of cost, revenue, profit efficiency, and stability inefficiency on bank profitability in India over the period 1997 to 2017. Additionally, this study examines the effect of efficiency on profitability for banks according to their ownership and for periods with (and without) the global financial crisis. The cost, revenue, and profit efficiency scores for 70 banks in India are estimated using stochastic frontier analysis. Our key findings are as follows. First, we find that cost, revenue and profit efficiencies positively influence the profitability conditions of Indian banks. Second, banks that are inefficient adversely influence bank performance, although the global financial crisis did not seem to impact the efficiency-profitability relationship. Finally, we find that bank ownership matters for the association between its efficiency and performance.

Drafts by Bijoy Rakshit

Usually how an investor invests in the market is heavily determined by the market efficiency beca... more Usually how an investor invests in the market is heavily determined by the market efficiency because if a market is efficient, it is extremely difficult to make excessive returns because in an efficient market there will be no undervalued securities. However, there is a probable scope of making excess returns if the market is not efficient. The objective of this paper is to study the efficiency of Indian Stock Market during the period of 2000-2016 using efficient market hypothesis (EMH) This article analyses the three popular stock indices of NSE namely NIFTY 50, CNX10, NIFTY Bank. This would not only test the efficiency of the Indian Stock Market but also test the random walk nature of the stock market. The study also makes an attempt to show the market efficiency taking the daily returns of Indian stock market. Univariate time series analysis of indices returns has been carried using test for randomness/ non stationary –runs test, Unit root testing (ADF and PP), ACF and other relevant statistical methods. The study concludes that except NIFTY Bank index of NSE the other series of stock indices (NIFTY50 CNX100) in the Indian Stock Market are found to be unbiased random time series and the random walk model can be applied in the Indian Stock Market. Alternatively except Nifty Bank others indices of NSE are efficient in its weak form.

Journal of Economics and Business, 2022

Abstract The study investigates whether changes in bank competition, efficiency, and risk-taking ... more Abstract The study investigates whether changes in bank competition, efficiency, and risk-taking affect the profitability of Indian commercial banks during 1996−2016. While assessing the determinants of profitability, this study considers a wide range of bank-specific, macroeconomic, and institutional factors that explain the variations in bank profitability. Results estimated through the two-step system GMM indicate that a higher level of bank competition deteriorates bank profitability in Indian banking. Regarding risk-taking, results reveal that the growing incidence of credit risk hampers bank profitability for the whole banking industry and across ownerships. However, higher levels of profit and cost efficiency are positively associated with bank performance. Other bank-specific, macroeconomic, and institutional variables appear to have influenced bank profitability in India. The joint effect of competition and efficiency (or risk-taking) has further been examined in this study.

International Social Science Journal, 2021

Abstract South Asia, a sub-region with nearly a third of the world's population living in ext... more Abstract South Asia, a sub-region with nearly a third of the world's population living in extreme poverty and hunger, has been affected by the COVID-19 pandemic in an unprecedented way. The pandemic has undermined the progress achieved by the subregion towards attaining sustainable development goals. This study argues that fostering environmental sustainability in the South Asian region is crucial to ?Building Back Better? while taking cognisance of future climate-related risks. With the low level of preparedness, the collapse of global supply chains, and restrictive regional integration, the individual country in the region lacks the fiscal and technical capacity to implement sustainable development goals effectively. Therefore, based on the analytical approach to regional integration, this paper explores the potential role of regional integration in ensuring environmental sustainability in South Asia. Additionally, this study illustrates how the COVID-19 pandemic has affected several environmental aspects at the regional level, such as clean energy, disaster risk reduction, and waste management, and shows how regional cooperation can address these challenges post pandemic. While previous studies mainly focus on regional integration in the European Union, this study targets the crucial importance of regional cooperation in South Asia in achieving environmental sustainability.

Managerial Finance, 2020

PurposeThe paper measures the degree of bank competition in Indian banking over the period 1996–2... more PurposeThe paper measures the degree of bank competition in Indian banking over the period 1996–2016. Using bank-level annual data, we revisit the case of banking competitiveness during the prefinancial and postfinancial crisis and examine whether the global financial crisis alters the level of bank competition in India. Additionally, this paper addresses the misspecification issues associated with the widely used Panzar–Rosse model in Indian banking context.Design/methodology/approachWe apply Panzar and Rosse (1987) H-statistic and evaluate the degree of bank competition by estimating the extent to which changes in input prices are reflected in revenues earned by banks. Subsequently, we link this measure of competitiveness to a number of structural indicators (HHI and CRn) to examine the structure-conduct-performance hypothesis, which assumes that a concentrated banking system can impair competition. The simple panel regression model was used to handle the empirical estimations.Fin...

Journal of Central Banking Theory and Practice, 2020

The primary purpose of this paper is to empirically investigate the impact of bank competition on... more The primary purpose of this paper is to empirically investigate the impact of bank competition on financial stability in India. We use a dynamic panel model to examine whether an increase in bank competition hindrances financial stability of commercial banks in India over the period 1996 to 2016. Findings reveal that in India, a higher degree of bank competition is positively associated with the prevalence of non-performing loans. Additionally, the positive impact of the Lerner index on Z-score lends support to competition-fragility hypothesis. However, we argue that both the views of competition-stability and competition-fragility can coexist in a single banking system like India.

South Asian Journal of Business Studies, 2019

Purpose Bank competition and financial stability are often cited as important drivers of economic... more Purpose Bank competition and financial stability are often cited as important drivers of economic growth. Bank competition plays a very significant role in enhancing the efficiency and determining the stability of a financial system. However, a question of interest is whether bank competition enhances or hindrances the economic growth of a country. The purpose of this paper is to investigate the role of bank competition and financial stability on economic growth for selected South Asian economies over the period 1997–2016. Design/methodology/approach To investigate whether bank competition enhances or hinders economic growth, the author applies a two-step estimation technique. First, the author estimates bank competition using the Lerner index and adjusted Lerner index and, second, examines the joint effect of bank competition and financial stability on economic growth applying both panel regression model and system GMM techniques. Findings Empirical findings reveal that the banking...

International Journal of the Economics of Business, 2019

This paper measures the degree of bank competition in India using a sample of 70 commercial banks... more This paper measures the degree of bank competition in India using a sample of 70 commercial banks over the period 1996-2016. To assess the degree of competition, we estimate the market power of each bank in our sample employing three nonstructural measures: the Lerner index, the adjusted Lerner index, and the Boone indicator. Bank-wise and year-wise estimates of the marginal cost required in all these measures are obtained using the semi-parametric method. The paper further attempts to undertake a comprehensive assessment of competition in Indian banking and identifies various bank-specific, macroeconomic, structural, and contestability indicators, which are supposed to explain level and variation of the degree of competition over time. Empirical findings reveal that public-sector banks in India exercise a relatively higher degree of bank competition compared to private and foreign-sector banks. However, aggregate results support that the Indian banking system is competitive in general. Unlike the structure-conduct-performance paradigm, which advocates that a concentrated banking system impairs competitiveness, our findings reveal that concentration measures hardly exert any effect on bank competition. Rather, contestability measures play a significant role in the determination of bank competition.

Buletin ekonomi moneter dan perbankan, Mar 24, 2022

This paper examines the effects of cost, revenue, profit efficiency, and stability inefficiency o... more This paper examines the effects of cost, revenue, profit efficiency, and stability inefficiency on bank profitability in India over the period 1997 to 2017. Additionally, this study examines the effect of efficiency on profitability for banks according to their ownership and for periods with (and without) the global financial crisis. The cost, revenue, and profit efficiency scores for 70 banks in India are estimated using stochastic frontier analysis. Our key findings are as follows. First, we find that cost, revenue and profit efficiencies positively influence the profitability conditions of Indian banks. Second, banks that are inefficient adversely influence bank performance, although the global financial crisis did not seem to impact the efficiency-profitability relationship. Finally, we find that bank ownership matters for the association between its efficiency and performance.

Usually how an investor invests in the market is heavily determined by the market efficiency beca... more Usually how an investor invests in the market is heavily determined by the market efficiency because if a market is efficient, it is extremely difficult to make excessive returns because in an efficient market there will be no undervalued securities. However, there is a probable scope of making excess returns if the market is not efficient. The objective of this paper is to study the efficiency of Indian Stock Market during the period of 2000-2016 using efficient market hypothesis (EMH) This article analyses the three popular stock indices of NSE namely NIFTY 50, CNX10, NIFTY Bank. This would not only test the efficiency of the Indian Stock Market but also test the random walk nature of the stock market. The study also makes an attempt to show the market efficiency taking the daily returns of Indian stock market. Univariate time series analysis of indices returns has been carried using test for randomness/ non stationary –runs test, Unit root testing (ADF and PP), ACF and other relevant statistical methods. The study concludes that except NIFTY Bank index of NSE the other series of stock indices (NIFTY50 CNX100) in the Indian Stock Market are found to be unbiased random time series and the random walk model can be applied in the Indian Stock Market. Alternatively except Nifty Bank others indices of NSE are efficient in its weak form.