Indira Gandhi Institute of Development Research

About: Indira Gandhi Institute of Development Research is a facility organization based out in Mumbai, Maharashtra, India. It is known for research contribution in the topics: Monetary policy & Inflation. The organization has 307 authors who have published 1021 publications receiving 18848 citations.

Mean reversion in stock prices: evidence from emerging markets

Abstract: This paper investigates whether stock‐price indexes of emerging markets can be characterized as random walk (unit root) or mean reversion processes. We implement a panelbased test that exploits cross‐sectional information from seventeen emerging equity markets during the period January 1985 to April 2002. The gain in power allows us to reject the null hypothesis of random walk in favor of mean reversion at the 5 percent significance level. We find a positive speed of reversion with a half‐life of about 30 months. These results are similar to those documented for developed markets. Our findings provide an interesting comparison to existing studies on more matured markets and reduce the likelihood of earlier mean reversion findings as attributable to data mining.

The environmental consequences of urban growth: cross-national perspectives on economic development, air pollution, and city size

Abstract: This study presents a quantitative assessment of the environmental consequences of urbanization in general and city bigness in particular in the context of the process of economic development. We focus attention on the relationship between ambient air quality and city size, and how it might differ between urban areas of developed and developing countries. First, the air pollution-city size relationship is characterized theoretically and explored empirically using ambient air quality data for various urban zones across an international sample of cities. While we find statistically significant relationships between pollution and city size, interesting developed-developing country differences emerge. Next, the relationship is re-estimated using contextual development covariates. Results show that the positive association between poor air quality and city size is not inevitable and tends to diminish with economic growth and the capacity for undertaking pollution abatement measures. It follows that restricting...

Debt and Corporate Governance in Emerging Economies: Evidence from India*

Abstract: We analyze the role of debt in corporate governance with respect to a large emerging economy, India, where debt has been an important source of external finance. First, we examine the extent to which debt acts as a disciplining device in those corporations where potential for over investment is present. We undertake a comparative evaluation of group-affiliated and non-affiliated companies to see if the governance role of debt is sensitive to ownership and control structures. Second, we examine the role of institutional change in strengthening the disciplining effect or mitigating the expropriating effect of debt. In doing so, we estimate, simultaneously, the relation between Tobin’s Q and leverage using a large crosssection of listed manufacturing firms in India for three years, 1996, 2000, and 2003. Our analyses indicate that while in the early years of institutional change, debt did not have any disciplinary effect on either standalone or group affiliated firms, the disciplinary effect appeared in the later years as institutions become more market oriented. We also find limited evidence of debt being used as an expropriation mechanism in group firms that are more vulnerable to such expropriation. However, the disciplining effect of debt is found to persist even after controlling for such expropriation possibilities. In general, our results highlight the role of ownership structures and institutions in debt governance.

Labor Markets in India: Issues and Perspectives

Abstract: Market-oriented structural reforms in India, begun in the 1980s and intensified in the 1990s, are widely believed to have put the economy on a path of higher growth. But there are concerns that outcomes in labor markets have not improved for large segments of the labor force. Many observers of India’s labor markets are bothered by the slow growth of employment in the organized sector—where the “good” jobs are. Despite growth of around 5% in GDP per capita between 1993/94 and 1999/2000, the share of the organized sector in total employment decreased from 7.3% to 7.1%.1 At the same time, jobs in the organized sector have themselves been undergoing a change, with contract labor getting a growing share of employment. More broadly, workers on daily or periodic contracts have increased their share of total wage and salary employment, in what some observers have described as the “casualization” of the Indian workforce.

Returns to education in India: Some recent evidence

Abstract: This paper estimates returns to education in India using a nationally representative survey. We estimate the standard Mincerian wage equation separately for the rural and urban sectors. To account for the possibility of sample selection bias, Heckman two-step procedure is used. The findings indicate that returns to education increase with the level of education and differ for rural and urban residents. Private rates of return are higher for graduation level in both the sectors. In general, the disadvantaged social groups of the society tend to earn lower wages. We find family background is an important determinant affecting the earnings of individuals. Using quantile regression method, we show that the effect of education is not the same across the wage distribution. Returns differ considerably within education groups across different points of the wage distribution. Returns to education are positive at all quantiles. The results show that the returns are lower at the bottom quantiles and are higher at the upper quantiles.