Evaluating efficiency gains from tenancy reform targeting a heterogeneous group of sharecroppers: Evidence from India (with Takashi Kurosaki and Saumik Paul), Center for Economic Institutions Working Paper Series No. 2016-10, 2016.
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Abstract
This paper reevaluates the effect of a tenancy reform, popularly known as Operation Barga, on agricultural productivity in West Bengal, India. We employ a transparent empirical strategy based on synthetic control. We focus on the varying intensity of Operation Barga across West Bengal districts by comparing the districts’ agricultural productivity with that of counterfactual districts using the synthetic control approach. Concerns over agro-climatic diversity and the recorded history of land reforms were also addressed while creating counterfactual districts. We find robust empirical evidence of a negligible effect on agricultural productivity growth. Next, we consider a theoretical framework to estimate the potential gains from Operation Barga in light of several types of sharecroppers. Consistent with the empirical findings, we conclude that the capacity of Operation Barga to enhance agricultural productivity is heavily constrained by the heterogeneity of sharecroppers in terms of wealth and livelihood structure.
Do Islamic banks shift from mark-up to equity financing when their contracting environments are improved? (with Nafis Alam),
Applied Economics Letters, 24(8), 545-548, 2017.
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Abstract
Islamic banks, as their charters require, should share their profits and losses with their customers through equity financing; but they do mark-up financing instead, which is similar to bank loans. Theoretically, one of the reasons is Islamic banks operate in poor contracting environments where equity financing is very risky. Using fixed effects models, we examine what Islamic banks do when the countries they are in reform their economies. We do not find better contracting environments induce Islamic banks to do more equity financing, which suggests that Islamic banks are unlikely to shift from mark-up to equity financing in the near future—they are likely to remain similar to conventional banks.
The effects of the three-point rule in individual sports: Evidence from chess (with Lee Yoong Hon and Kung Ming Tiong), MPRA Paper No. 71060, 2016.
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Abstract
We examine the effects of the three-point rule in individual sports. We consider chess in which most tournaments use the standard rule while some tournaments use the Bilbao rule, which is identical to the three-point rule in soccer: We observe the same pairs of chess players playing under both rules, a research design that fits fixed-effect models. We find the Bilbao rule makes games 33 percent more decisive, mostly to white players’ advantage who win 50 percent more games. We identify two mechanisms why the Bilbao rule works: It encourages players to play longer and discourages them from using drawish openings. These results suggest incentive schemes like the three-point rule work in individual sports in which efforts and financial rewards are directly linked and game dynamics and strategic interactions among teammates and with opponents are less complex.
Does the three-point rule make soccer more exciting? Evidence from a regression discontinuity design (with Lee Yoong Hon),
Journal of Sports Economics, 17(4), 377-395, 2016.
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We examine whether the three-point rule—the increase in rewards for a win from two to three points that the Fédération Internationale de Football Association (FIFA) adopted in 1995—makes Bundesliga games become more exciting. Using regression discontinuity design as the empirical strategy, we do not find evidence that the three-point rule makes games more decisive, increases the number of goals, or decreases goal differences. We only find some evidence that the three-point rule increases the second-half goals of losing first-half teams. Overall, our results suggest that, in the case of Bundesliga games, the three-point rule does not work as FIFA intended.
Investors are unwilling to pay for corporate social responsibility activities: Evidence from India’s Companies Act 2013 (with Saumik Paul), MPRA Paper No. 61360, 2015.
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We examine the effects of corporate social responsibility (CSR) activities on the values of firms. Using a non-parametric regression discontinuity design, exploiting a natural experiment induced by India’s Companies Act 2013, we find investors devalue the stocks of firms that do CSR activities by 2-5%, which suggests investors are unwilling to pay for CSR activities.
Family hardship and the growth of micro and small firms in Indonesia,
Bulletin of Indonesian Economic Studies, 50(1), 53-73, 2014.
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I examine what happens to the total assets of micro and small firms in Indonesia when their owners experience hardship such as the death or sickness of family members, crop losses, or natural disasters. Using a representative sample of firm owners, I find that deaths of family members reduce the assets of such firms, that the adverse effects of these are long-lasting and economically large, and that the smaller the firms the greater the magnitude of these effects. There is no evidence, however, that the sickness of family members, crop losses, or natural disasters reduce firms’ assets. These results suggest that only severe family hardship impedes the growth of micro and small firms.
Bank ownership and efficiency in the aftermath of financial crises: Evidence from Indonesia (with Yohanes E. Riyanto),
Review of Development Economics, 18(1), 93-106, 2014.
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This paper examines the relationship between types of ownership of banks and their efficiency in the aftermath of a financial crisis using Greene's “true” panel data stochastic frontier model, which takes into account unobserved heterogeneity among banks. The Indonesian banking sector is analyzed using financial data of 144 banks operating in Indonesia over the period of 2000Q4–2005Q2. In the aftermath of the 1997 Asian financial crisis, the cost efficiency of all banks improves over time on average. However, there is some evidence that, as these banks improve their efficiency, state-owned banks are the least efficient banks while joint-venture and foreign-owned banks are the most efficient.
The effect of publishing hospital charges on healthcare costs: Evidence from Singapore,
Empirical Economics Letters, 12(5), 521-526, 2013.
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This paper examines the effect of publishing hospital charges on healthcare costs. We compare hospital charges before and after Singapore’s Ministry of Health started publishing the statistics of hospital charges on its website in the late 2003. After controlling for health-condition-, hospital-, and room-type time-invariant factors, both observed and unobserved, we do not find evidence of a decrease in healthcare costs. However, we find some evidence of an increase in cost dispersion, a decrease in patients’ length of stay at hospitals, and an increase in hospital care cost per day.
The impact of the strategic sale of restructured banks: Evidence from Indonesia (with Yohanes E. Riyanto),
World Development, 40(3), 446–457, 2012.
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We examine the effect of strategic sale, which is the sale of banks to strategic foreign investors, on bank performance. The Government of Indonesia implemented such a policy as part of a bank restructuring in the aftermath of the 1998 banking crisis. Using difference-in-differences models, we find that strategic sale leads to a 12–15% cost reduction. These results are robust to the use of other estimators such as difference-in-differences matching estimators and stochastic-frontier analysis, to that of other performance measures such as return on assets and net interest margin, and to that of different sample types. These results suggest that strategic sale could play an important role in restructuring troubled banks in developing countries.
Do banks respond to capital requirements? Evidence from Indonesia (with Yohanes E. Riyanto),
Applied Financial Economics, 21(9), 651-663, 2011.
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Abstract
Using dynamic panel data models, and addressing a common inappropriate use of simultaneous equation models in the literature, we examine the effect of capital requirements on banks’ behaviour in Indonesia. We find that banks tend to comply with capital requirements by increasing their capital ratios when the ratios are lower than, or falling towards, the 8% regulatory minimum. However, our results are mostly driven by large private-domestic banks and heavily undercapitalized banks that were closely monitored by the regulator in the aftermath of the 1998 crisis. Therefore, whether in normal circumstances banks in Indonesia comply with capital requirements remains questionable.