Sushanta Mallick | Queen Mary, University of London (original) (raw)

Papers by Sushanta Mallick

European Journal of Operational Research, 2018

In this paper we take up the analysis of production functions / frontiers removing the assumption... more In this paper we take up the analysis of production functions / frontiers removing the assumptions of known functional form for the productivity equation, given the heterogeneity of productivity and the endogeneity of inputs at firm level. The assumption of exogenous regressors is removed through taking account of the first order conditions of profit maximization. We introduce latent dynamic stochastic productivity in our framework and perform Bayesian analysis using a Sequential Monte Carlo / Particle-Filtering approach. We investigate the performance of the new approach relative to alternative methods in the literature, in a substantive application to Indian non-financial firms, and found that TFP growth has remained stagnant at firm level in India despite rapid growth at the aggregate level, with technical efficiency or catching-up effect driving TFP growth in the recent years rather than technological progress or frontier shift.

European Financial Management, 2017

Journal of Macroeconomics, 2014

This article appeared in a journal published by Elsevier. The attached copy is furnished to the a... more This article appeared in a journal published by Elsevier. The attached copy is furnished to the author for internal non-commercial research and education use, including for instruction at the authors institution and sharing with colleagues. Other uses, including reproduction and distribution, or selling or licensing copies, or posting to personal, institutional or third party websites are prohibited. In most cases authors are permitted to post their version of the article (e.g. in Word or Tex form) to their personal website or institutional repository. Authors requiring further information regarding Elsevier's archiving and manuscript policies are encouraged to visit: http://www.elsevier.com/authorsrights

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).

This paper investigates whether inclusive banking can boost bank-level performance, using an inte... more This paper investigates whether inclusive banking can boost bank-level performance, using an international sample of 1,740 banks over the period 2004-2015. We find that there is a significant positive association between financial inclusion and bank efficiency. Greater financial inclusion helps banks in reducing the volatility of their deposit-funding share as it provides more stable long-term funds for banks, while also mitigating the adverse effects of their return volatility. The association is stronger in countries with limited restrictions on banking activities or more capital regulation stringency as the deposit channel enables greater flow of low-cost funds for high-return investments. The results are robust to instrumental variable analysis, multiple dimensions of financial inclusion (supply, demand, and pro-access policy), and a difference-in-differences estimator that exploits cross-country and temporal variations in actively promoting an inclusive agenda, further confirmi...

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 . .

Nipe Working Papers, 2011

" "F Fi is sc ca al l P Po ol li ic cy y i in n t th he e B BR RI IC Cs s" " F F.. J Ja aw wa ad ... more " "F Fi is sc ca al l P Po ol li ic cy y i in n t th he e B BR RI IC Cs s" " F F.. J Ja aw wa ad di i S Su us sh ha an nt ta a K K.. M Ma al ll li ic ck k R Ri ic ca ar rd do o M M.. S So ou us sa a NIPE WP 19/ 2011

Studies in Nonlinear Dynamics and Econometrics

The North American Journal of Economics and Finance, 2013

This paper relates credit spreads (CDS prices) in the UK banking sector with the performance of t... more This paper relates credit spreads (CDS prices) in the UK banking sector with the performance of the housing sector. Using data on banking sector CDS spreads for the period January 2004 to April 2011, we find that house price dynamics are a key driving factor behind the increase in credit spreads as reflected in CDS prices. Also we find that as stock prices increase, both bank capital and bank borrowing capacity increase that in turn decreases credit risk. Furthermore as banking sector liquidity increases banks tend to lend to less credit-worthy (subprime) borrowers that in turn increases credit risk in the banking sector. Collectively the results shed light on the determinants of credit risk in the banking sector.

International Review of Financial Analysis, 2013

Th he e r re ea al l e ef ff fe ec ct ts s o of f f fi in na an nc ci ia al l s st tr re es ss s ... more Th he e r re ea al l e ef ff fe ec ct ts s o of f f fi in na an nc ci ia al l s st tr re es ss s i in n t th he e E Eu ur ro o z zo on ne e" " S Su us sh ha an nt ta a K K.. M Ma al ll li ic ck k R Ri ic ca ar rd do o M M.. S So ou us sa a NIPE WP 12/ 2011 " "T Th he e r re ea al l e ef ff fe ec ct ts s o of f f fi in na an nc ci ia al l s st tr re es ss s i in n t th he e E Eu ur ro o z zo on ne e" " S Su us sh ha an nt ta a K K.. M Ma al ll li ic ck k R Ri ic ca ar rd do o M M.. S So ou us sa a N NI IP PE E * *

International Review of Applied Economics, 2012

ABSTRACT Applying the stochastic frontier framework, this study explores the diffusion and absorp... more ABSTRACT Applying the stochastic frontier framework, this study explores the diffusion and absorption of technological knowledge in China’s manufacturing firms, based on a panel of more than 10,000 local and foreign-invested firms over the period 1998–2001. Our empirical approach allows us to distinguish between technological progress (TP) and technical efficiency (TE) in analysing whether R&D, exports and the presence of foreign direct investment simultaneously enhance TP through knowledge spillovers in a single framework and whether different types of domestic absorptive capacity moderate external knowledge spillovers in relation to TE. The results show that there are positive inter-industry productivity spillovers from R&D and foreign presence, whereas evidence of intra-industry productivity spillovers from FDI to Chinese firms is less robust. We find evidence that absorptive capacity is one of the key determinants to quantitatively explain intra-industry differences in productivity of local Chinese firms. The findings have important policy implications.

Financial Markets, Institutions & Instruments, 2011

ABSTRACT This paper contributes to the literature on capital structure and firm performance. Usin... more ABSTRACT This paper contributes to the literature on capital structure and firm performance. Using firm‐level data covering over 11,000 firms from 47 countries over a recent period of 1997‐2007, we address the effect of different sources of financing on corporate performance, employing a matching process, which allows an adequate 'like‐for‐like’ comparison between high and low level of financing by firms. Robust to different matching estimators, the main findings are consistent with the theories of capital structure, in that firms with high debt‐to‐equity ratio tend to have lower returns to shareholders (profitability) and lower internal efficiency (productivity). The results become more robust when we separate the firms into advanced and emerging country‐groups or countries with high/low levels of financial development. Given the lower level of leverage below 50% on average in emerging markets (or in countries with lower level of financial reforms), firms in these economies face lower risk of financial distress and thereby less adverse effect on firm profitability and productivity, relative to their counterparts in advanced economies. We also find that retained earnings and equity financing improve performance, while debt financing by firms particularly in the form of bank loans leads to lower performance, although not so in the case of debt raised through issuing bonds.

Economics Letters, 2012

" "F Fi in na an nc ci ia al l R Re ef fo or rm ms s a an nd d I In nc co om me e I In ne eq qu u... more " "F Fi in na an nc ci ia al l R Re ef fo or rm ms s a an nd d I In nc co om me e I In ne eq qu ua al li it ty y" " L Lu uc ca a A Ag gn ne el ll lo o S Su us sh ha an nt ta a K K.. M Ma al ll li ic ck k R Ri ic ca ar rd do o M M.. S So ou us sa a NIPE WP 21/ 2012 L Lu uc ca a A Ag gn ne el ll lo o S Su us sh ha an nt ta a K K.. M Ma al ll li ic ck k R Ri ic ca ar rd do o M M.. S So ou us sa a N NI IP PE E *

Journal of International Financial Markets, Institutions and Money, 2009

This paper attempts to provide an economic model in the context of develop-ing countries to addre... more This paper attempts to provide an economic model in the context of develop-ing countries to address the policy strategies related to poverty reduction. With a view to deal with the shortcomings of the existing approaches as regards poverty reduction, this paper develops a model on the basis of the policy framework of the IMF and the World Bank to show how demand growth can be a crucial mechanism in determining the potential rate of growth, and then to suggest ways in which poverty—conceptualised officially in abso-lute terms with a subjective cut-off point (e.g. US 1/1/1/2 a day), and a new objective measure in terms of consumption deprivation—can be linked with the key policy variables contained in the adjustment programmes. A strategy of investment in infrastructure and in human development, and improving access to credit markets, particularly in rural areas to encourage or ‘crowd in ’ private investment is a precondition for growth and poverty alle-viation. Debt relief can only pro...

Russian monetary policy has failed persistently to achieve sustained low inflation, both in absol... more Russian monetary policy has failed persistently to achieve sustained low inflation, both in absolute terms and relative to the peer group of countries similarly exiting from Soviet-style central planning. This paper explores the reasons for this state of affairs by analysing the kind of monetary policy that has been pursued by the central bank during the period 1995 to 2009. Our contribution is to search for a possible transmission channel between the real interest rate, inflation rate, exchange rate, output growth and foreign reserve growth, after having controlled for the effect of oil price inflation. Using a vector autoregressive model in error-correction form and using sign restrictions methodology, we show that the monetary authorities' failure to abate double-digit inflation appears to be driven by the policy of exchange rate targeting, as reflected in our identified exchange rate shocks.

This paper studies the pricing to market (PTM) behaviour of Indian exporters during the economic ... more This paper studies the pricing to market (PTM) behaviour of Indian exporters during the economic reforms period (1992-2005). A PTM model has been estimated using panel data at the four-digit level of classification for the G3 and three emerging markets (Brazil, China and South Africa), distinguishing also homogeneous from differentiated goods. Overall, we observe that there is clear evidence of incomplete exchange rate passthrough (ERPT) to buyers ’ currency prices. This degree of ERPT is net of changes in the level of protection faced by India’s exporters (import tariffs in destination markets), inflation and openness in the export destination market, a macroeconomic policy index partly reflecting changes in exporter’s costs, the share of the exporter in the destination market and the share of the product in the exporter’s total exports. The empirical results indicate that Indian firms do practice PTM and absorb exchange rate changes into their mark-up in G3 markets, partly owing t...

Given limited research on monetary policy rules in emerging markets, this paper estimates monetar... more Given limited research on monetary policy rules in emerging markets, this paper estimates monetary policy rules for five key emerging market economies: Brazil, Russia, India, China and South Africa (BRICS) analysing whether the monetary authority reacts to changes in financial markets, in monetary conditions, in the foreign exchange sector and in the commodity price. To get a deeper understanding of the central bank’s behaviour, we assess the importance of nonlinearity using a smooth transition (STAR) model. Using quarterly data, we find strong evidence that the monetary policy followed by the Central Banks in the BRICS varies from one country to another and that it exhibits nonlinearity. In particular, considerations about economic growth (in the cases of Brazil and Russia), inflation (for India and China) and stability of financial markets (in South Africa) seem to be the major drivers of such nonlinear monetary policy behaviour. Moreover, the findings suggest that the monetary au...

This paper provides time-series and panel evidence on the monetary policy transmission for five k... more This paper provides time-series and panel evidence on the monetary policy transmission for five key emerging market economies: Brazil, Russia, India, China and South Africa (BRICS). The analysis is based on a Bayesian vector auto-regression (VAR) model that includes seven key variables. Instead of the conventional Choleski decomposition as used in the literature, Bayesian methodology has been used to identify the monetary policy (positive interest rate) shock along with using the more recent sign restrictions approach. Finally, to summarise the response for this group of key emerging market economies, we carry out a panel VAR exercise, which provides further robustness of our finding that contractionary monetary policy has a negative effect on output. These results are robust to changes in the specification, the methodology and sub-sample time horizon.