Clinical Associate Professor of Public Policy
Executive Director, Bharti Institute of Public Policy
Affiliation Indian School of Business
SSRN ID 256160
Personal Webpage http://www.isb.edu/faculty/RajeshChakrabarti/index.htm
- In The Media
Professor Rajesh Chakrabarti is Clinical Associate Professor of Public Policy and Executive Director, Bharti Institute of Public Policy, at the ISB, Mohali Campus. He is a fellow of the Wharton Financial Institutions Center, a member of the Academic Panel of the International Centre for Financial Regulation, London, and a columnist for the Financial Express. He has taught previously at GeorgiaTech, USA and University of Alberta, Canada and has held several visiting positions including at the Indian Statistical Institute Delhi, Indian Institute of Management, Calcutta, and the Federal Reserve Bank at Atlanta. Professor Chakrabarti’s current research focuses on the Indian Financial Sector. He has authored four books including the recent, Bihar Breakthrough, on the turnaround of Bihar state; edited two books including the recent, Capital Markets in India; published several articles in top Finance, Economics and Management journals; and authored several case studies in finance, strategy and entrepreneurship. He is frequently quoted in the media in India and abroad, has served in multiple government committees, and is a member of the editorial board of Corporate Governance – An International Review, a Wiley- Blackwell journal.
Ph D, University of California at Los Angeles, 1999
MBA (Management), The Indian Institute of Management, 1993
Bachelor of Science (Economics Honors), Presidency College, Calcutta University, 1991
Chakrabarti, Rajesh. (Forthcoming) "Bengal’s Infrastructure Challenge", Economic and Political Weekly
Chakrabarti, Rajesh. (Forthcoming) "Do Indian Acquisitions Add Value?", Money and Finance, 61-73M&A activity in India—both domestic and cross-border—has exhibited explosive growth in recent years. International evidence is quite clear about the value-reducing nature of the average acquisition, both on announcement (for the acquirer) as well as in the long run. We show that in India, in contrast to this finding, the effects of acquisition on acquirer returns—both on announcement as well as over a three-year post-acquisition window—over and above the market index are significantly positive. However, the statistical significance of the positive long-run effects disappears when we correct for industry effects. Also acquirers do considerably worse compared to their performance vis-à-vis the index or with respect to their relevant industry indices in a three-year pre-acquisition window, suggesting that the acquisitions are actually value reducing, but the markets fail to perceive them as such on announcement.
Allen, Franklin., Chakrabarti, Rajesh., De, Sankar., Qian, Jun., Qian, Meijun. (2012) "Financing Firms in India", Journal of Financial IntermediationWith extensive cross-country datasets and India firm samples, as well as our own surveys of small and medium firms, we examine the legal and business environments, financing channels, and growth patterns of different types of firms in India. Despite the English common-law origin and a British-style judicial system, Indian firms face weak investor protection in practice and poor institutions characterized by corruption and inefficiency. Alternative finance, including financing from all non-bank, non-market sources, and generally backed by non-legal mechanisms, constitutes the most important form of external finance. Bank loans provide the second most important external financing source. Firms with access to bank or market finance are not associated with higher growth rates. Our results indicate that bank and market finance is not superior to alternative finance in fast-growing economies such as India.
Chakrabarti, Rajesh. (2011) "On the Jalan Committee Report", Economic and Political Weekly, 46 (02), 14-17The recommendations of the Jalan Committee on the governance of stock exchanges have evoked a storm of protests, especially from sections of those involved in trading securities. This is not surprising, for the overarching stance of the committee is that exchanges are in the nature of “public institutions” with significant externalities for the economies they serve. This is because they have a dual purpose of providing trading services as well as carrying out regulatory functions of monitoring traders and listed companies. Thus they approximate in nature an “essential facility”.
Ravi, Shamika., Chakrabarti, Rajesh. (2011) "At the Crossroads: Microfinance in India", Money and Finance, 125-148As of early 2011, the microfinance industry in India, one of thelargest in the world, is facing a moment of reckoning. The recent developmentsin Andhra Pradesh, the cradle of microfinance in India, have stamped thefuture of the sector with a huge question mark. This paper sketches thebackground of the microfinance movement in India as well as its currentgeographical distribution and outreach; chief models and major players; and,finally, the economics of interest rates in the sector. It discusses the offeringsmade by Microfinance Institutions (MFIs) ranging from simply credit to otherfinancial services to a plethora of social services packaged with microfinanceand the effect this has on interest rates. It discusses briefly the tension betweenthe twin objectives of profitability and development and how this is tackleddifferently in profit-oriented MFIs versus non-profits, and outlines the role ofgovernment in the microfinance movement in India. The recent events inAndhra Pradesh, their rationale, fallout and implications in the larger context,are discussed.
Chakrabarti, Rajesh., Ashraf, Rasha., Fu, Richard., Jayraman, Narayanan. (2010) "Takeover Immunity, Takeovers, and the Market for Non-Executive Directors", Financial ManagementWe develop and test two competing hypotheses that relate the market for non-executive directors to the level of external monitoring mechanism of the firms they serve. The Reward for Discretion Hypothesis posits that directors are valued more when they display discretion concerning their choice of ATP levels rather than follow a rule. Alternatively, the CEO Risk Aversion Hypothesis implies that CEOs seek directors with inclination for uniform and high ATP levels. We examine how changes in ATP levels and approval of value creating/destroying acquisitions affect the careers of non-executive directors. Our results, based on data from about 3,000 listed U.S. companies during 1994-2003, support the Reward for Discretion Hypothesis.
Chakrabarti, Rajesh. (2009) "Mars-Venus Marriages: Culture and Cross-border M&A", Journal of International Business Studies, 40 (2), 216-236Using a sample of over 800 cross-border acquisitions during 1991–2004, we find that, contrary to general perception, cross-border acquisitions perform better in the long run if the acquirer and the target come from countries that are culturally more disparate. We use mainly the Hofstede measure of cultural dimensions to measure cultural distance, but also examine alternative proxies. The positive relationship of performance to cultural distance persists after controlling for several deal-specific variables and country-level fixed effects, and is robust to alternative specifications of long-term performance. Cash and friendly acquisitions tend to perform better in the long run. There is also some evidence of synergies when acquirers are from stronger economies relative to the targets.
Chakrabarti, Rajesh. (2008) "A Bigger Role for Foreign Banks – Benefits and Concerns", Souvenir for FICCI-IBA Conference on "Global Banking: Paradigm Shift"
Chakrabarti, Rajesh. (2008) "Corporate Governance in India", Journal of Applied Corporate Finance, 20 (1), 59-72Among more recent changes, the enactment of Sarbanes Oxley type measures in 2004 which includes protections for minority shareholders in family- or promoter-led businesses has contributed to recent increases in institutional and foreign stock ownership. And while family- and government-controlled business groups continue to be the rule, India has also seen the rise of successful companies like Infosys that are free of the influence of a dominant family or group and have made the individual shareholder their central governance focus. But for all its shortcomings, Indian corporate governance has taken major steps toward becoming a system capable of inspiring confidence among institutional and, increasingly, foreign investors. The Securities and Exchanges Board of India (SEBI), which was established as part of the comprehensive economic reforms launched in 1991, has made considerable progress in becoming a rigorous regulatory regime that helps ensure transparency and fair practice. And the National Stock Exchange of India, also established as part of the reforms, now functions with enough efficiency and transparency to be generating the third-largest number of trades in the world, just behind the NASDAQ and NYSE. The Indian corporate governance system has both supported and held back India's ascent to the top ranks of the world's economies. While on paper the country's legal system provides some of the best investor protection in the world, enforcement is a major problem, with overburdened courts and significant corruption. Ownership remains concentrated and family business groups continue to be the dominant business model, with significant pyramiding and evidence of tunneling activity that transfers cash flow and value from minority to controlling shareholders. But for all its shortcomings, Indian corporate governance has taken major steps toward becoming a system capable of inspiring confidence among institutional and, increasingly, foreign investors. The Securities and Exchanges Board of India (SEBI), which was established as part of the comprehensive economic reforms launched in 1991, has made considerable progress in becoming a rigorous regulatory regime that helps ensure transparency and fair practice. And the National Stock Exchange of India, also established as part of the reforms, now functions with enough efficiency and transparency to be generating the third-largest number of trades in the world, just behind the NASDAQ and NYSE. Among more recent changes, the enactment of Sarbanes Oxley type measures in 2004which includes protections for minority shareholders in family- or promoter-led businesses has contributed to recent increases in institutional and foreign stock ownership. And while family and government-controlled business groups continue to be the rule, India has also seen the rise of successful companies like Infosys that are free of the influence of a dominant family or group and have made the individual shareholder their central governance focus.
Chakrabarti, Rajesh., Scholnick, Barry. (2007) "The Mechanics of Price Adjustment: New Evidence on the (Un)importance of Menu Costs", Managerial and Decision EconomicsThis paper examines nominal price rigidities in an environment, e-commerce, where literal menu costs can be assumed not to exist. We argue that if we can empirically show that nominal rigidities do still exist in the e-commerce environment, then it implies that other kinds of costs besides menu costs, such as management costs, must be causing these nominal rigidities. This evidence is of importance because of the central role that menu costs play in Keynesian macroeconomics. In this paper we examine the price changing behavior of two leading online booksellers}Amazon.com and BarnesandNoble.com}and find strong evidence that nominal price rigidities do indeed persist on the Internet
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Indian Financial System
Chakrabarti, Rajesh (2011) "7 quotes given in the last year", Knowledge@Wharton, December 31, 2011
Chakrabarti, Rajesh (2011) "Role of Urban Cooperative Banks (UCBs) in Financial Inclusion", ISB Insight- Vol.9; Issue:1, December 31, 2011
Chakrabarti, Rajesh (2011) "Executive compensation", ET Now, December 31, 2011
Chakrabarti, Rajesh (2011) "Expert Committee on Staff and Skills Action Plan at the IRDA", The Financial Express, August 26, 2011
Chakrabarti, Rajesh (2011) "Wanted: Independent Directors", Economic Times, August 20, 2011
Chakrabarti, Rajesh (2011) "Column: Hawkish on inflation, softish on growth", The Financial Express, June 17, 2011
Chakrabarti, Rajesh (2011) "Column : What Mamata can learn from Nitish", The Financial Express, May 13, 2011
Chakrabarti, Rajesh (2011) "Column : The secret of government banks", The Financial Express, April 01, 2011
Chakrabarti, Rajesh (2010) "Fortnightly column ", Financial Express, December 31, 2010
Chakrabarti, Rajesh (2008) "Takeovers in India: Do They Work? ", The Economic Times, March 21, 2008
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