Ongoing Research


Selected Working Papers:

Abstract- This analysis explores the implications of technological shifts towards greener and sustainable innovations on acquisition propensity between firms with different technological capacities. Using a dataset of completed control acquisition deals over the period of 2009-2020 from 23 OECD countries, we find that innovative firms are more likely to acquire innovative target companies. We also find that green acquirors (i.e. firms with green patents) are more inclined to enter into acquisition deals with green firms, possibly due to their technological proximity and informational advantages which further enhances their post-acquisition green innovation performances. Our results also show an increase in green acquisitions after the Paris Agreement by non-green acquiror firms, and these are more pronounced for acquirors in climate policy relevant sectors and countries with low environmental standards than their counterparts. However, green acquisitions after the Paris Agreement do not show any significant impact on their post-acquisition innovation performances, raising concerns related to greenwashing behaviour by investing firms.


Abstract- This paper documents the emergence of a regional financial cycle in Asia, evidenced by commonality in regional bank flows, and its impact on domestic credit. Using a dataset of 24,169 non-financial Indian firms for the period 2001-2019, we establish that the regional financial cycle has a positive and significant impact on domestic corporate debt, as opposed to an insignificant effect on foreign currency corporate debt, after controlling for the global financial cycle. We find that both interbank markets and monetary policy conditions in the region act as transmission channels for this effect. We show that transparent firms which have lower monitoring costs are relatively more exposed to the regional financial cycle, suggesting that affiliates of foreign banks play an important role. However, the exposure of domestic credit markets reduces once regulators institute more stringent policy actions such as macroprudential policies, selective capital controls and floating currency regimes.



Abstract- Recent theoretical work indicates that debt maturity facilitates firm-level innovation by shielding managers from the pressure of short-term failures and aligning debt payoffs with the uncertain payoff of innovation activities. In this paper, we provide empirical evidence consistent with this prediction. We show that when debt maturity is aligned with the innovation trajectory of firms, firms produce more and better-quality innovations. Ceteris paribus, a one percent increase in long-term debt is associated with a 42.9 percent increase in innovation quantity and 23.12 percent in innovation quality. The increase in innovation quantity and quality occurs via an increase in the level of explorative than exploitative innovation, effectively enabling firms to place more “risky bets” on new innovations. Finally, we find that firms which are younger and with lower internal cash flow are more likely to use long-term debt for innovation activities as compared to their counterparts in order to pursue risky projects and thus, motivate innovation. Our findings highlight the important role of debt maturity in shaping the innovation trajectory of firms, and thereby their long-term growth.