Assistant Professor of Finance
National University of Singapore (NUS)
Email: asarkar@nus.edu.sg
Research Areas: Empirical Corporate Finance. I study the interactions between politics, policy, and culture on financing and investment.
Smokestacks and the Swamp with Emilio Bisetti, Stefan Lewellen, and Xiao Zhao
Review of Financial Studies, Accepted
Political Voice and (Mortgage) Market Participation: Evidence from Minority Disenfranchisement with Seongjin Park and Nishant Vats
Journal of Financial Economics, Conditionally Accepted
Dirty Air and Green Investments: The impact of pollution information on portfolio allocations with Raymond Fisman, Pulak Ghosh, and Jian Zhang
Journal of Financial Economics, Conditionally Accepted
Experience of Communal Conflict and Inter-group Lending, with Raymond Fisman, Janis Skrastins and Vikrant Vig
Journal of Political Economy 128.9 (2020): 3346-3375.
Effects of CEO Turnover in Banks: Evidence Using Exogenous Turnovers in Indian Banks , with Krishnamurthy Subramanian and Prasanna Tantri
Journal of Financial and Quantitative Analysis 54.1 (2019): 183-214.
Poverty Spreads in Deposit Market with Emilio Bisetti
Abstract: We document significant deposit interest rate differentials along the income distribution - moving from the bottom to the top income decile increases deposit rates by 55% of the sample median rate. These spreads persist independent of banking competition, and instead appear to arise from banks internalizing households' participation in nondeposit markets. Consistent with this hypothesis, only income components related to participation can explain our baseline findings, and quasi-exogenous reductions in participation incentives through increases in capital gains taxes are associated with lower spreads along the participation distribution. Our findings highlight lack of participation as a source of deposit market power.
Consumer Protection in Housing Markets and the Democratization of Homeownership with Sumit Agarwal, Mingxuan Fan, Pulak Ghosh, and Xiaoyu Zhang
Abstract: Consumer protection regulation is central to household finance, yet its role in expanding homeownership access remains poorly understood. We study India's Real Estate Regulation and Development Act, which introduced consumer protections targeting real estate developers, the primary suppliers of housing. The effects are theoretically ambiguous: reduced developer risk may expand access, but compliance costs may restrict supply. Consumer protection expands mortgage access, with the largest gains for first-time buyers, women, lower-income households, and marginalized groups. Project completion improves and defaults decline. While some incumbents exit, new developers enter at a higher rate, expanding affordable housing supply. Consumer protection democratizes homeownership.
Political Power-Sharing, Firm Entry, and Economic Growth: Evidence From Multiple Elected Representatives with Harsha Dutta, Pulak Ghosh, and Nishant Vats
Abstract: Should political institutions concentrate power in more hands or a single hand? This paper provides microeconomic evidence on the relationship between multiple elected representatives and economic growth. We find that increasing the number of politicians governing an area leads to greater firm entry and real economic activity. The identification strategy exploits uneven overlap of electoral and administrative boundaries, leading to a quasi-random variation in the number of politicians governing adjacent administrative units. This setup allows us to implement a geographic regression discontinuity design across boundaries separating a split (multiple politicians) unit from an unsplit (single politician) unit. Greater state efficiency, lower regulatory costs, and reduced cronyism due to increased checks and balances among multiple non-aligned politicians is the primary driver of higher firm entry.
Political Economy of Financial Regulation with Rainer Haselmann, Shikhar SIngla, and Vikrant Vig
Abstract: Increased interdependencies across countries have led to calls for greater harmonization of regulations to prevent local shock from spilling over to other countries. Using the rulemaking process of the Basel Committee on Banking Supervision (BCBS), this paper studies the process through which harmonization is achieved. Through leaked records, we document that the probability of a regulator opposing an initiative increases if their domestic national champion (NC) opposes the new rule, particularly when the proposed rule disproportionately affects them. Next, we show that smaller banks, even when they collectively have a higher share in the domestic market, do not have any impact on regulators’ stand – suggesting that regulators’ support for NCs is not guided by their national interest. Further, we find the effect is driven by regulators who had prior experience working in large banks. Finally, we show this unanimous decision-making process results in significant watering down of proposed rules. Overall, the results highlight the limits of harmonization of international financial regulation.
Policy Uncertainty, Multinational Firms, and Reallocation
Abstract: Multinationals are often considered a tool through which economic shocks originating in a region get magnified. This paper, in contrast shows that elevated economic policy uncertainty (EPU) in a country is associated with increase in investment by a firm in other regions. I find that (multinational) firms hold back investment in a country subjected to higher EPU which they reallocate to projects in other countries. I find the impact to be higher for firms with tighter financial constraint. I also find the reallocation is directed more towards countries that provide a better legal environment. The study uses establishment-level data of mining firms as a laboratory. Limited input-output linkage across mines allows me to study the impact caused particularly through the allocation decision of firms. The empirical strategy exploits the variation in: i) parent country of mines operating in the same country; & ii) country of operation of mines owned by same firm. Overall my findings highlight that multinationals could potentially stabilize the escalation of regional policy uncertainty shocks to global crisis.
Firm Boundaries and Political Uncertainty: Evidence from State Elections in India
Abstract: Using subsidiary-level data for Indian firms and staggered elections across Indian states, this paper finds that political uncertainty's impact on firm performance varies by organizational form. The analysis builds on the idea that a firm belonging to a conglomerate, when exposed to political uncertainty is co-insured by other firms of the group. In states with imminent elections, I find stand-alone firms have relatively low leverage and high borrowing cost. The impact, however, is attenuated for stand-alones with lesser borrowing constraints. The results are consistent with being driven largely by the (reduced) supply than (subdued) demand for capital.