Paroma Sanyal

Bio: Paroma Sanyal is an academic researcher from Brandeis University. The author has contributed to research in topics: Deregulation & Competition (economics). The author has an hindex of 13, co-authored 34 publications receiving 503 citations.

Ownership, Competition, and Bank Productivity: An Analysis of Indian Banking in the Post-reform Period

Abstract: This paper investigates the effect of ownership and competition on Indian bank productivity since the 1991 reforms. We find that Indian private banks dominate the public and foreign banks both in terms of productivity levels and productivity growth, with the new Indian private banks leading the charge. Competition has a positive impact on productivity for the old Indian private banks, and all the other banks are hurt by competition — the worst hit being new Indian private banks. A similar picture emerges on the productivity growth side, with the new Indian private bank productivity growth being the worst affected as competition increases. An analysis of the pre- and post-1998 periods shows that the latter period displays a much higher productivity gap between the Indian private banks and the public and foreign banks. Indian private bank productivity and productivity growth suffer due to increasing competition in the post-1998 period.

Powering Progress: Restructuring, Competition, and R&D in the U.S. Electric Utility Industry

Abstract: This paper investigates the R&D behavior of regulated firms when they transition to a competitive environment. Using data from the US electricity market from 1990-2000, we analyze how competition, institutional changes, and political constraints have contributed to the precipitous decline in R&D expenditure by regulated utilities. We find that firms reduce their R&D significantly at the very early stages of restructuring or even when they expect restructuring to occur. Once the emerging institutional structure becomes clear, R&D spending recovers but is later offset by another decline when restructuring legislation is enacted. In addition, greater competition and the nearing of such competition adversely affects research spending. In aggregate, R&D declines by 78.6 percent after electricity markets are restructured. Firm and state characteristics matter, and a majority of the research is conducted by large generation companies located in pro-research states, especially if they are part of a larger holding company. Such characteristics have a different impact on research spending in the pre- and post-restructured periods.

Labor Disputes and the Economics of Firm Geography: A Study of Domestic Investment in India

Abstract: Acrimonious relations between employers and employees in developing countries have often been cited as impediments to progress. This article considers various measures of labor disputes and investigates whether these have detrimental effects on the location choice of new domestic investment across the various states of India. Conventional wisdom holds that an increase in measures such as the number of strikes, the number of man‐days lost in work stoppages, and the percentage of unionized workers would hinder the location of new projects. Using panel data and a fixed‐effects methodology that controls for the effect of state‐specific unobservables, we find significant evidence that this is indeed the case in India. Furthermore, disaggregation by industrial classifications shows that, although labor disputes continue to exert negative effects, location choices are also conditioned on factors such as proximity to raw materials and minerals.

A Few Bad Apples: An Analysis of CEO Performance Pay and Firm Productivity

Abstract: We investigate the relationship between CEO performance pay incentives and firm productivity. In general, we find an inverse U-shaped relationship between productivity and the sensitivity of CEO wealth to share value (delta) and a positive relationship between productivity and the sensitivity of CEO option wealth to stock return volatility (vega). Thus, a high delta associated with CEO risk-aversion lowers productivity, but a high vega from stock options offsets this effect. In looking at delta and vega jointly, we also find that options do not always achieve their intended purpose. These results are stronger among firms that are weakly governed or when high transaction costs prevent the writing of an optimal compensation contract.

The effect of deregulation on environmental research by electric utilities

Abstract: This paper analyzes the impact of deregulation and restructuring on public-interest environmental research conducted by electric utilities in the US from 1990 to 2001. I find that deregulation has had a substantial negative impact on such expenditures, which have declined by 40%. However, restructuring has had no significant impact. In addition, the 1990 Clear Air Act Amendments have adversely affected such expenditures, contrary to the positive impact these regulations had on pollution abatement R&D as shown in the literature. Results also suggest that state and firm characteristics and regulator preferences play a strong role in the conduct of such research.

The Economic Institutions of Capitalism

Abstract: The 2008 crash has left all the established economic doctrines - equilibrium models, real business cycles, disequilibria models - in disarray. Part of the problem is due to Smith’s "veil of ignorance": individuals unknowingly pursue society’s interest and, as a result, have no clue as to the macroeconomic effects of their actions: witness the Keynes and Leontief multipliers, the concept of value added, fiat money, Engel’s law and technical progress, to name but a few of the macrofoundations of microeconomics. A good viewpoint to take bearings anew lies in comparing the post-Great Depression institutions with those emerging from Thatcher and Reagan’s economic policies: deregulation, exogenous vs. endoge- nous money, shadow banking vs. Volcker’s Rule. Very simply, the banks, whose lending determined deposits after Roosevelt, and were a public service became private enterprises whose deposits determine lending. These underlay the great moderation preceding 2006, and the subsequent crash.

The politics of regulation

Abstract: The purpose of this course is to acquaint students with the wide variety of regulatory processes, policies, and institutions in this country. Furthermore, students will develop a sophisticated and rigorous understanding of selected elements of regulatory politics, processes, and policies involving a regulatory agency of the U.S. government. To accomplish this, a variety of materials will be presented. These will involve reading, discussion and integration of the concepts of regulation, as well as understanding the processes by which regulatory policy is developed and implemented. Also, the impacts or results of such regulatory policies will be treated. In addition, students will gain a good deal of experience and develop techniques for conducting a diverse set of research and writing skills.

The unequal effects of liberalization: evidence from dismantling the license Raj in India

Abstract: This paper investigates whether the effects, on registered manufacturing out-put,employment, entry and investment, of dismantling the 'license raj' - a system of centralcontrols regulating entry and production activity in this sector - vary across Indian stateswith different labor market regulations. The effects are found to be unequal depending onthe institutional environment in which industries are embedded. In particular, followingdelicensing, industries located in states with pro-employer labor market institutions grewmore quickly than those in pro-worker environments. Our results emphasize how localinstitutions matter for whether industry in a region benefits or is harmed by thenationwide delicensing reform.