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Topics In International Economics and Finance

Paper Session

Monday, Jan. 4, 2021 12:15 PM - 2:15 PM (EST)

Hosted By: Association of Indian Economic and Financial Studies
  • Chair: Raja Kali, University of Arkansas

Assimilation of Indian Immigrants in the United States and H1B Visa Program

Kusum Mundra
Rutgers University
Omid Bhageri
Kent State University


Compared to the first half of the twentieth century there was a shift of the immigrant groups
from Europe to Latin America and Asia in the U.S., particularly after the 1965 Immigration
Reform Control Act (IRCA). Post IRCA and combined with the computer technology revolution
Indian immigrants have increased to record levels in the U.S. Indians are the second largest
groups of immigrants in the U.S. (after Mexicans) and constituted more than 6% of the 43.3
population of immigrants in 2015. Moreover between 1980 – 2010 Indian immigrant population
grew more than eleven fold.1 Indian immigrant groups are called model minority IT generation
groups (Chakraborty et al.2017). In spite of the general trends that Indian immigrants are the
most skilled in the labor market among the immigrant groups and have the highest per capita
income, this paper will examine the economic assimilation, particularly focused on earnings, of
Indian college and higher educated graduates in the U.S. using National Survey of College
Graduates (NSCG) over the years 2010 – 2017. 23 We examine the earning growth of Indian
immigrants in the U.S. relative to natives to get insight on the rate of economic assimilation of
first generation Indians in the U.S. In particular, we will look at whether there are any earning
growth differences across cohorts as well as whether the degree was obtained in the U.S. versus
home country. Since NSCG has detail information on entry visa of the Indian immigrants, we
will also explore whether the H1B policy changes had any shifts in the earning growth of Indian

The Impact of Foreign Competition on the Innovation Intensity of Manufacturing Firms

Tomasz Brodzicki
University of Gdansk
Dorota Ciołek
University of Gdansk
Jakub Michał Kwiatkowski
University of Gdansk
Usha Nair Reichert
Georgia Institute of Technology


This paper investigates the relationship between the extent of product market competition from
international and domestic sources and the innovation intensity at the firm level. The analysis
is performed for a sample of Polish manufacturing enterprises observed over the period 2007
to 2017. We utilize various measures of product market competition at the 2-digit NACE level
measured on a full dataset of InfoCredit as well as standard market penetration indices. The
intensity of innovation by firms is measured using the patent data of the Polish Patent Office
Database as well as firm-level TFP. We first establish stylized facts on the extent of foreign
competition in the Polish manufacturing industry sectors. Secondly, we analyse its impact on
the innovation intensity of firms in our dataset separately on firms’ patenting and firms TFP. In

line with the heterogeneous firms’ literature we control for a number of firm-specific, sector-
specific and region-specific effects. The initial results are promising and bringing new

interesting insights into the investigated relationships for the transition economies. The overall
impact of increased foreign competition is negative for both. For TFP the impact is however
positive for firms from high and medium-high technology sectors and adverse for firms from
medium-low and low technology sectors. At the same time the impact of domestic competition
shows the postulated inverted U shape pattern.

Is the Grass Greener on the Other Side? Portfolio Flows and Sustainable Investing

Niranjan Chipalkatti
Seattle University
Quan Le
Vin University
Meenakshi Rishi
Seattle University


Sustainable investing allocates investments based on environmental, social and governance
factors (ESG). Sustainable investing has come a long way as more investors are recognizing the
importance of investing in companies that seek to combat climate change, environmental
destruction, while promoting corporate responsibility. A recent report by the Forum for
Sustainable and Responsible Investment notes that sustainable, responsible and impact investing
(SRI) now accounts for $ 12 trillion of the $ 47 trillion of the assets under professional
management in the US. 1 This represents a 38% increase over 2016.
This paper will focus on portfolio equity and bond flows to countries to examine the importance
of environmental, social and governance factors in attracting investments to capital markets in
different countries. Our econometric investigation focuses on the association between
environmental, social and governance indicators and the attractiveness of country as a
destination for portfolio flows. We specifically focus on whether countries with higher levels of
progress with environmental sustainability policies, lower levels of climate risk and better
sustainability reporting by companies attract more portfolio flows from investors. To assess the
incremental impact of these factors, a pooled time series, cross-sectional model will be
econometrically tested for a panel of countries over the period 2000-2018. Our model will
control for other push and pull factors documented in the literature.

Indian Stock Market: A Cross-Sectional Analysis and its Predictability

Nusret Cakici
Fordham University
Gautam Goswami
Fordham University


Cross-sectional stock return predictability has always been an intriguing issue for the
researchers particularly applying it to international markets as it relates to a number
of puzzles in finance. In this paper we would like to provide a comprehensive
analysis on the stock return predictability in Indian stock market by employing both
portfolio method and cross-sectional regressions. The data for Indian stock market

starts from 1994 and end in 2018. We find strong predictive power of size, book-to-
market ratio, cash-flow-to-price ratio, and earnings-to-price ratio as well as

momentum and short-term-reversal. The total as well as idiosyncratic volatility are
not a consistent stock return predictors in Indian stock market. The results exist for
stocks listed in National Stock Exchange as well as Bombay Stock Exchange. Like
evidence for the other markets (e.g. U.S), the momentum and short term reversion
qualifies as a useful predictor in the portfolio method. Overall, the two variables
above i.e. momentum and short-term reversal along with size and the variables
related to cheapness of stocks such as book-to-market ratio and cash-flow-to-price
ratio demonstrate reliable forecasting power.

Do Strong Institutions Really Combat the Bitterness of Corruption? A Study of BRIC Stock Returns

Geeta Lakshmi
University of Lincoln
Keshab Bhattarai
University of Hull
Shrabani Saha
University of Lincoln


Higher stock-returns (SR) are magnets for investment but it is unclear whether corruption lowers SR, thus, weakens stock markets. We explore whether institutions (Democratic accountability, Bureaucratic quality and Law and order) improve efficiency of stock markets by combating potential corruptions. Impacts of corruption on BRIC countries’ SR are assessed with panel regressions and extreme bound analyses using monthly data during 1995-2014. While stronger institutions enhance stock returns, but corruption shows the opposite effect. The interaction of corruption with institutions illustrates some surprising mixed effects. In addition, co-movements with global and emerging markets show inverse and direct complimentary effects on SR, respectively, providing diversification opportunities. Previous studies spotlight the macro impacts of corruption on economic growth; our study extends it to stock market returns. This helps to determine micro components of economic growth and to assess the role of institutions in it.

Pandemic Death Traps

Anand Goel
Stevens Institute of Technology
Anjan Thakor
Washington University in St. Louis


Faced with a pandemic, how does a government decide whether to shut down the economy? We develop a model in which the economy can face health shocks in two periods. The government can invest in shock mitigation but keep the economy open, or shut it down. A shutdown reduces expected deaths but weakens the ability to invest in mitigation against future health shocks. We derive conditions under which each policy is optimal. The career concerns of advisory public health experts can induce a shutdown even when not shutting down Pareto dominates. An efficient financial market predisposes countries towards shutdowns.
Phanindra V. Wunnava
Middlebury College and IZA
Ram Upendra Das
Centre for Regional Trade
Rama Seth
Copenhagen Business School
Amit Batabyal
Rochester Institute of Technology
Chandan Kumar Jha
LeMoyne College
JEL Classifications
  • F4 - Macroeconomic Aspects of International Trade and Finance
  • O0 - General