Working Papers

1. Ajay, Ranjitha, & Ingole, Somnath ( 2023). Economic Policy Uncertainty and Firm Value: Evidence from the Indian Context.  Available at SSRN: https://ssrn.com/abstract=4511328 or http://dx.doi.org/10.2139/ssrn.4511328 

Abstract:  This study investigates the relationship between economic policy uncertainty (EPU) and firm value in the Indian context, an area that has received limited attention in prior research. Drawing on information asymmetry theory, the findings reveal a significant negative relationship between EPU and firm value, indicating that changes in economic policies, tax regulations, fiscal and monetary policies, and trade dynamics significantly impact the firm value. The study also investigates the impact of leverage (supply side effect) and cash holdings (precautionary motive) as moderating factors. The study reveals that firms strategically utilize leverage to manage their financial obligations and enhance their market valuation. Business group affiliation during EPU periods is associated with higher market value, indicating advantages in capital access and reputation. Sector-specific dynamics show that manufacturing firms with higher cash holdings experience lower market valuations compared to service sector firms. These findings provide valuable insights for firms, policymakers, and investors in navigating economic policy uncertainties in the Indian market. 

2. Ingole, Somnath (2023). What Happened to the Oil Price and Macro Economy Relationship? Does It Tell the Same Story? A Case of Indian Economy . Available at SSRN: https://ssrn.com/abstract=4128249 or http://dx.doi.org/10.2139/ssrn.4128249 

Abstract: This study assesses impact of asymmetric oil price shocks on India’s economic growth by using autoregressive distributive lag (ARDL) model and fully modified ordinary least square (FMOLS). This study covers dataset on monthly frequency from 2004: Q1 to 2020: Q4. Findings from the ARDL model shows that real oil prices don’t have short run or long-run relationship with economic growth. In other words, real oil prices fluctuations are no longer able to explain the variations in India’s economic growth. This because of, in India, the prices of petroleum products have been insulated through subsidies from the volatility of international crude oil prices to curb the domestic inflation, so oil price may not have directly impact on domestic inflation.