Forces for Change (in co-operation
In collaboration with some of my colleagues
at Sheffield University Management School and in co-operation with BITC, I worked on the Forces for Change project.
We identified six major forces that would shape the business landscape in the future. These are demographic change, climate
change, increased competition for resources, geopolitical changes, changes in social values, and technological changes. Our
thesis is that as these changes take place they will shape interactions between governments, civil societies and the international
community. The political economy of these interactions will, in turn, shape the nature of formal institutions, and rules and
regulations that govern business activity. Businesses will have to strategise to deal with these changes. At the one end of
the strategy spectrum, they can be tactical and reactive, and adjust to these changes to the best of their abilities. At the
other end, they can proactively engage with the society, the political establishment, the technology creators and others to
influence the major forces and, consequently, the changes in institutions, rules and regulations.
BITC home page | Forces for Change home page
UKIERI Trilateral Research Grant (UKIERI funded)
This project aims to examine two related issues that can facilitate (or hinder) private sector
development – financial development and corporate governance – in India, a BRICS country. Specifically, it shall address four questions: (a) have financial reforms reduced informational inefficiency, volatility
and transactions cost in India’s capital market? (b) how have these reforms affected allocational efficiency of credit
and risk-taking by commercial banks? (c) how have financial and real sector reforms affected the quality of corporate governance?
and (d) how have changes in corporate governance quality affected firm behaviour and firm performance? The Indian results
will be compared to those for Turkey that implemented quite a different sequence of financial (and real) sector reforms. The
research team includes researchers from the Indian Institute of Management at Calcutta, Madras School of Economics, and Southern
Illinois University at Edwardsville.
UKIERI home page | Chakrabarty home page | Kutan home page | Selakra home page
Enterprise Research Centre (ESRC funded; along with BIS, BBA and TSB) ESRC grant page
I was associated with the work package that focuses on financing issues related to enterprise growth, and worked
with Mike Wright of Imperial College and Stuart Fraser of Warwick Business School. My activities as part of the ERC were as
follows: [a] Stuart Fraser, Mike Wright and I wrote a white paper summarising the available evidence about credit and non-credit
(e.g., venture capital, business angels) modes of financing firms, identifying issues that require further evidence based
research. [b] I used the KfW-ZEW data on German start-up firms to write a paper on the financing patterns of
German start-ups during the early stage of the recent financial crisis. [c] Stuart Fraser, Mike Wright and
I provided input to BIS about the functioning of business banks around the world. I specifically provided input about Germany's
KfW and Canada's BDC. Later, I provided input into the newly formulated British Business Bank's internal research
paper on mezzanine finance.
do we know about entrepreneurial finance and its relationship with growth (with S. Fraser and M. Wright). International
Small Business Journal, 33(1): 70-88.
Choice of funding source
and investment gap in start-up firms during the financial crisis: Evidence from a cross-section of German firms
Download research paper
High growth firms -- characteristics
and determinants (NESTA funded) NESTA project page
The project addresses a number of aspects of high growth firms in the UK,
such as productivity and internationalisation. The Aston Business School team includes Mark Hart, Jun Du, Yama Temouri,
Yundan Gong, Michael Anyadike-Danes and Karen Bonner. I am associated with a work package that examines financing constraints
among British firms, across a wide range of 2-digit industries and geographical regions. We examine it using both stylised
econometric methods, as well as a stochastic frontier based approach discussed in my 2012 Journal of Banking &
Finance paper (DOI).
NESTA home page | Download research paper
Relationship between high growth firms and internationalisation
This project will examine the relationship between internationalisation of firms and
their growth, with emphasis on high growth firms. Broadly speaking, these are firms that have an annualised growth
rate greater than 20 percent over a three year period, when growth is measured in terms of employment or turnover. Aside from
me, the project team includes, among others, Mark Hart, Yundan Gong and Yama Temouri of Aston Business School.
UKTI home page
Productivity and its drivers in the UK and comparable
developed countries (ESRC funded) ESRC grant page #1 ESRC grant page #2
A significant proportion of cross-country variation in GDP growth is explained by the
variation in productivity growth rate. Hence, it is important to develop an understanding about policies that raise the trend
rate of productivity growth for an economy. That in turn, requires an understanding of the cyclicality of productivity itself
and that of its determinants. Since economic downturns reduce the opportunity cost of productive resources, they provide opportunities
to implement changes that raise the aforementioned trend rate of productivity growth.
The first part of the project
examined the academic literature on the cyclicality of productivity and its determinants. The second part of the project examined
the available evidence about the British government's policies regarding these determinants, especially in the context
of the most recent recession, and drew inferences about the likely trend in productivity growth (as well as structural challenges)
during the recovery. The project was undertaken in cooperation with researchers and policymakers at the UK Department
of Business Innovation and Skills.
BIS home page | Download research paper
Impact of state-ownership of banks on privately-owned firms’ access to credit (British Academy
In this project, my co-authors and I examine the hypothesis that significant
presence of state-owned banks eases financial constraints of a wide range of firms. We do this in two parts, using firm-level
panel data from India, where public sector banks continue to overwhelmingly dominate the credit market,
despite having steadily lost market share to private sector banks since the mid 1990s. In the first of two papers, we examine
the determinants of financial constraints of firms. We employ a stochastic frontier methodology that allows
us to identify the frontier, and measure financial constraint as distance from that frontier. In the second paper, we
examine how firms' access to credit is impacted by monetary policy initiatives of the central bank.
Bhaumik, Pranab Das and Subal Kumbhakar (2012) A Stochastic Frontier Approach to Modelling Financial Constraints
in Firms: An Application to India. Journal of Banking and Finance, 36(5): 1311-1319.Download working paper
Sumon Bhaumik, Subal Kumbhakar
and Kai Sun (forthcoming) A Semiparametric Approach to Estimating Financing Constraints
in Firms. European Journal of Finance, 21(12): 992-1004, 2015.
Download early version
Enterprise risk management in India
This project extends the research of the Conference Board on Enterprise
Risk Management (ERM) in the USA to India. It uses case studies of four Indian companies -- Tata Chemicals, Tata Motors,
Dr. Reddy's and ICICI Bank -- to draw conclusions about the nature of ERM in the Indian corporate sector. The
final report, co-authored with Ellen Hexter and Matteo Tonello, has been released in April 2008.
Enterprise performance in Lagos
The World Bank sought expert opinions on the factors that hinder growth and financial
viability of firms in Lagos, the largest non-oil industrial region of Nigeria. The basis for the opinions
was firm-level data collected by the Bank from the population of large firms, and random samples of small and medium
enterprises, and informal sector firms. Saul Estrin and I acted as consultants to the Bank. The final report was submitted
to the Bank in the summer of 2006.
Market development in emerging markets - II (DfID funded)
The Department for International Development (DfID) funded project aimed
at exploring the nature of impact of institutions on market development in emerging markets. The project was managed
by Saul Estrin, and the Centre for New and Emerging Markets at London Business School served as the secretariat for the
key question addressed in the course of the project was how local institutions in emerging markets affect entry of firms into
product markets. It also explored the impact of entry on firm-level total factor productivity. The project builds on the seminal
work of Hernando de Soto, as also on the research of Mark Roberts, James Tybout and Simeon Djankov, among others.
The empirical work was undertaken using firm-level secondary data from
the BRICS countries, namely, Brazil, Russia, India, China and South Africa, and Senegal. I was involved in the Indian
end of the project, and worked closely with the Indian team led by Shubhashis Gangopadhyay of India Development Foundation. The
project came to an end in 2005.
Sumon Bhaumik, Shubhashis Gangopadhyay and Shagun Krishnan (2009) Entry, Reforms
and Productivity: Some Evidence from the Indian Manufacturing Sector. Review of Development Economics, 13(4): 658-672.
Sumon Bhaumik, Shubhashis Gangopadhyay and Shagun Krishnan (2008) Policy,
Economic Federalism, and Product Market Entry: The Indian Experience. European Journal of Development Research, 20(1):
Bhaumik, Shubhashis Gangopadhyay and Shagun Krishnan (2007) Entry, Reforms Complementarity and Performance: A Tale of Two
Indian Manufacturing Sectors, Economic Systems, 31(4): 375-390.
Market development in emerging markets - I (DfID funded)
The Department for International Development (DfID) funded project aimed
at exploring some aspects of the functioning of multinational enterprises in emerging markets. The project was managed by
Klaus E. Meyer and Saul Estrin, and the Centre for New and Emerging Markets at London Business School served as the secretariat
for the project.
The key question addressed in the course of the project was how local institutions in emerging markets interact
with resource requirements of the multinational enterprises in determining the choice of mode of entry of these enterprises
into the emerging markets. The importance of this choice arises from the correlation between the entry mode and factors like
technology transfer that influence the spillover effects of foreign direct investment.
Firm-level data were collected from multinational
enterprises operating in Egypt, India, South Africa and Vietnam. I was involved in the management of the project, and worked
closely with K.E. Meyer and S. Estrin, on the one hand, and with the Indian team, led by Subir Gokarn and Laveesh
Bhandari, then at the National Council of Applied Economic Research in New Delhi, on the other. The project came to an
end in 2003.
Klaus E. Meyer, Saul Estrin, Sumon Bhaumik and Mike Peng (2009) Institutions, Resources, and Entry Strategies
in Emerging Economies. Strategic Management Journal, 30(1): 61-80.
Bhaumik, Saul Estrin and Klaus E. Meyer (2007) Determinants of Employment Growth at MNEs: Evidence from Egypt, India,
South Africa and Vietnam. Comparative Economic Studies, 49(1): 61-80.
Sumon Bhaumik and Stephen Gelb (2005)
Determinants of MNCs' Mode of Entry into an Emerging Market: Evidence from Egypt and South Africa. Emerging Market
Finance and Trade, 41(2):5-24.
report on Bulgaria (Global Development Network funded)
The Global Development Network (GDN) sponsored by the World Bank solicited
proposals for country reports on transition economies of Central and Eastern Europe and developing countries around the world.
My proposal for Bulgaria, developed jointly with Ivona Jackimova and Alexander Shivarov of Varna University of Economics,
received a nod. The final report was submitted to GDN in 2001.
Sumon Bhaumik (2001) Bulgaria: Legacy, Transition and the Soft Underbelly of Macroeconomic Stability. Money
& Finance, July-September.
Report on tax administration in India (UNDP funded)
The United Nations Development Programme (UNDP) had sponsored a programme to evaluate tax
administration in India. The project was managed by the National Institute for Public Finance and Policy, New Delhi. I co-authored
the section on property tax administration in India, along with Om Prakash Mathur. The final report was submitted to the UNDP
and the Government of India in 1997.
Bhaumik (1998) Property Tax: A Survey of the Problems. Asia-Pacific Tax Bulletin, vol. 4, no. 5.