Research Interests:
Working Papers:
Publications:
Journal Articles:
- Primary: International Trade, Innovation, and Development Economics
- Secondary: Finance
Working Papers:
- Import Competition, Knowledge Diffusion, and Innovation (with R. Ahsan) (R&R at Journal of Urban Economics)
- Successful innovation depends on the stock of knowledge that innovators have access to. Yet, empirical analysis of the impact of trade on innovation abstracts from such knowledge diffusion. We address this gap in the literature by drawing upon the universe of Indian patent applications between 1995 and 2006, which we map to a spatially granular level. We use this original dataset to provide the first evidence of how knowledge diffusion shapes the innovation response of firms facing import competition. We find that, on average, import competition lowers innovation. However, firms that are close to other patenting firms (knowledge access) innovate more: a firm with the 80th percentile knowledge access increases its patents by 3.28% after experiencing a 10% increase in imports. These results suggest that the pre-existing spatial distribution of innovators is an important determinant of how import competition will affect overall innovation.
- Successful innovation depends on the stock of knowledge that innovators have access to. Yet, empirical analysis of the impact of trade on innovation abstracts from such knowledge diffusion. We address this gap in the literature by drawing upon the universe of Indian patent applications between 1995 and 2006, which we map to a spatially granular level. We use this original dataset to provide the first evidence of how knowledge diffusion shapes the innovation response of firms facing import competition. We find that, on average, import competition lowers innovation. However, firms that are close to other patenting firms (knowledge access) innovate more: a firm with the 80th percentile knowledge access increases its patents by 3.28% after experiencing a 10% increase in imports. These results suggest that the pre-existing spatial distribution of innovators is an important determinant of how import competition will affect overall innovation.
- Ethnic Politics and the Distributional Effects of Trade Liberalization: Evidence from India (with A. Aneja and S. K. Ritadhi) (Under Review)
- Do globalization shocks contribute to the rise of identity politics? We examine this question in the context of India’s 1991 trade liberalization episode, and study how tariff reforms contributed to the electoral success of caste-based parties during the 1990s. Combining industry-level tariffs with pre-reform employment shares in a shift-share design, we find that regions facing larger reductions in trade protection witnessed increased political support for political parties committed to the representation of marginalized caste groups. Increases in both caste-based party vote share and total seats are concentrated in areas that are more rural, lower skilled, and have larger concentrations of voters from marginalized caste groups. Examining mechanisms, we find tariff reforms to have widened the caste earnings gap, in large part due to the adverse consequences of tariff reforms falling on agricultural workers – a segment of the labor market in which marginalized castes are heavily over-represented. The empirical findings are thus consistent with the explanation that the adverse effects of trade liberalization were disproportionately borne by historically marginalized citizens, who in turn voted for ethnic parties advocating their policy interests in targeted
redistribution.
- Do globalization shocks contribute to the rise of identity politics? We examine this question in the context of India’s 1991 trade liberalization episode, and study how tariff reforms contributed to the electoral success of caste-based parties during the 1990s. Combining industry-level tariffs with pre-reform employment shares in a shift-share design, we find that regions facing larger reductions in trade protection witnessed increased political support for political parties committed to the representation of marginalized caste groups. Increases in both caste-based party vote share and total seats are concentrated in areas that are more rural, lower skilled, and have larger concentrations of voters from marginalized caste groups. Examining mechanisms, we find tariff reforms to have widened the caste earnings gap, in large part due to the adverse consequences of tariff reforms falling on agricultural workers – a segment of the labor market in which marginalized castes are heavily over-represented. The empirical findings are thus consistent with the explanation that the adverse effects of trade liberalization were disproportionately borne by historically marginalized citizens, who in turn voted for ethnic parties advocating their policy interests in targeted
- Bank Entry, New Loans, and Misallocation (with N. Mitra) (Under Review)
- We examine whether the mandated introduction of new private (both domestic and foreign) banks impacts resource misallocation. Using unique firm-bank matched data for Indian manufacturing firms, we find that new banks had little impact on between-firm allocation. New banks primarily extended credit to large firms, enabling them to invest in both tangible and intangible assets, thereby increasing within-firm physical productivity. While easier credit access reduced capital market distortions by 9%, it increased input and product distortions, offsetting the gains from reallocation. A counterfactual analysis suggests new banks contributed a 3–5% increase in aggregate manufacturing output, driven solely by productivity improvements.
- War, Geopolitics, and Trade Diversion (with Anindya S Chakrabarti and Avi Dutt) (Under Review)
- Wars - and more broadly, geopolitics - affect international trade flows, often by changing trade destinations and partners. While export destination choices by countries affected by a war are more readily observable, such evidence for firms from non-participating countries is rare. Following the onset of the 2022 Russia–Ukraine war, products like leather experienced a war-induced demand expansion from Russia. We use bills of lading data for India to show that leather exporters redirected their sales to Russia relative to Oceania, South-East Asia, Africa and the Caribbean while leaving the US and European markets unperturbed. Sales to Russia nearly doubled due to both quantity and price increases, driven by incumbent exporters exporting non-sanctioned products using air routes more intensively. Effects were significantly higher in the first six months of the war, but persisted for one and a half years suggesting a longer term trade diversion phenomenon. Similar export patterns of other war-induced products such as pharmaceutical (especially, surgical) and food serve as evidence of external validity.
- R&D Tax Credit and Product Quality vs. Scope (with S. Mathur, S. Sircar, and R. Verma)
- Do firms with heterogeneous in-house R&D capacity respond discordantly in terms of product development to an industrial policy aimed at boosting R&D expenditure? We utilize an R&D tax credit policy introduced in 1998 by the Indian Govt. which was aimed at firms with in-house R&D units in certain groups of industries. We find that the policy led to increase in R&D expenses for all firms, but the effect on product development is quite different. Small and medium-sized firms spend their new R&D investments to expand product scope, while large firms invest in upgrading the quality of the products. These effects are largely driven by exporters and firms producing differentiated products. We rationalize our findings using a heterogeneous firm model in which a firm maximizes output along three dimensions: product scope, scale, and quality. Lastly, our results show significant welfare gains as the aggregate price index decreased by about 93%. To our knowledge, ours is one of the first to show that the R&D tax credit policy can promote industrial development through gains from increased product quality and variety.
- When a Protectionist Trade Policy turns into an Industrial Policy: Evidence from India (with A. de Pirro)
- Technical Barriers to Trade (TBTs) can serve as powerful protectionist tools, yet it remains unclear whether or not they benefit domestic firms. This paper studies one such key regulation, in terms of mandatory testing and certification for all parts and components of new vehicles, targeting the automotive sector introduced by India in 2001, and examines how domestic firms responded to that. Using detailed data on technology adoption, inputs used, products produced from 1997–2005 and exploiting exogenous variation in exposure across industries, we document three main effects for automotive firms: (i) TBTs increased technology adoption expenditures, driven by both R&D and technology transfer; (ii) firms upgraded their input mix using high-quality inputs, but continue producing existing product lines of higher value; and (iii) all these adjustments led to higher market share for domestic firms in the home market, expansion in both extensive and intensive margin of exports, and increase in Revealed Comparative Advantage (RCA) of that sector at the global level. Overall, we underscore that TBTs can act as an implicit industrial policy tools that can stimulate firm upgrading and structural transformation.
- Import Competition and Heterogeneous Responses of Banks (with S. K. Ritadhi) (Under Revision)
Publications:
Journal Articles:
- Can a Trade Policy Change Gender Equality? New Evidence from Chile (with U. Banerjee and L. Castro)
- Journal of International Economics 157: 104143, 2025 [pdf]
- Chinese Import Competition and Prices: Evidence from India (with M. Henry and R. Singh)
- Oxford Bulletin of Economics and Statistics 86(6): 1484-1510, 2024 [pdf]
- Import Competition, Formalization, and the Role of Contract Labor (with R. Singh and V. Soundararajan)
- The World Bank Economic Review 38 (4): 708-740, 2024 [pdf]
- Import Competition, Labour Regulations, and Firm Outsourcing (with D. Mitra and A. Sundaram)
- Journal of Development Economics 168: 103272, 2024 [pdf]
- Bank Ownership and Firm Performance
- Economica 91 (361): 238-267, 2024 [pdf]
- Cross-border Environmental Regulation and Firm Labor Demand (with A. Chakrabarti and C. Chatterjee)
- Journal of Environmental Economics and Management 117: 102753, 2023 [pdf]
- Intellectual Property Regimes and Wage Inequality (with S. Bhattacharya and C. Chatterjee)
- Journal of Development Economics 154: 102709, 2022 [pdf]
- Chinese Competition and Product Variety of Indian firms (with M. Henry)
- Journal of Comparative Economics 47 (2): 367-395, 2019 [pdf]
- Input-trade Liberalization and the Demand for Managers: Evidence from India (with O. Raveh)
- Journal of International Economics 111: 159-176, 2018 [pdf]
- The Great Trade Collapse and Indian Firms
- World Economy 41 (1): 100-125, 2018 [pdf]
- Environmental Standards, Trade and Innovation: Evidence from a Natural Experiment
- Environment and Development Economics 22 (4): 414-446, 2017 [pdf]
- Does Environmental Regulation Indirectly Induce Upstream Innovation? New Evidence from India (with C. Chatterjee)
- Research Policy 46 (5): 939-955, 2017 [pdf]
- Top three articles in 2017 w/the most social media attention @ResearchPolicy
- Research Policy 46 (5): 939-955, 2017 [pdf]
- Judicial Quality and Regional Firm Performance: The Case of Indian States
- Journal of Comparative Economics 44 (4): 902-918, 2016 [pdf]
- Does Openness Affect Inequality? A Case Study for India (with A. Barua)
- Review of Development Economics 14 (3): 447-465, 2010 [pdf]
- Trade Reform, Managers, and Skill Intensity: Evidence from India [pdf]
- in M. Bacchetta and M. Helble (eds.), Trade Adjustment in Asia: Past Experiences and Lessons Learned, pp. 229-275, 2019
- Trade and Industrial Performance since the WTO Reforms: What Indian Evidences Suggest? (with A. Barua and D. Chakraborty) [pdf]
- in R. M. Stern and A. Barua (eds.), India and the WTO: Issues and Negotiating Strategies, pp. 121-144, 2010
- Environmental Service Negotiation and India: Priorities and Concerns (with O. De) [pdf]
- in B. DebRoy et al. (eds.) the trade game: negotiation trends at WTO and concerns of developing countries, pp. 203-214, 2006
- Creditor Rights, Firm Credit, and Product Scope (with V. Tyazhelnikov)
- Input Tariffs, Roads, and Female Employment: Evidence from Ethiopia (with W. Gebre)
- Divided by Skill, Driven by Competition: Outsourcing Decisions at the Firm Level (with L. Castro and V. Tyazhelnikov)
- Trade Reform, M&A Activity, and Family Firms (with H. Yang)
- GST, Inputs Use, and Quality Upgrading (with Yogeshwar Bharat)
- Cotton and Conflict: How the U.S. Civil War Revolutionized India's Industrial and Social Hierarchy (with U. Banerjee)
- Does Gender Reform Affect Financial Behaviour of Firms? New Evidence from India (with S. Banerjee and U. Banerjee)
