Browsing by Author "Chakraborti, Rajdeep"
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Publication A model of managerial compensation, firm leverage and credit stimulus(Elsevier, 2024-06) Gete, Pedro; Chakraborti, Rajdeep; Dahiya, Sandeep; Ge, Lei; Ministerio de Ciencia, Innovación y Universidades; Agencia Estatal de Investigación; https://ror.org/02jjdwm75We study a model in which leverage and compensation are both choice variables for the firm and borrowing spreads are endogenous. First, we analyze the correlation between leverage and variable compensation. We show that allowing for endogenous compensation and leverage can explain the conflicting findings of the empirical literature. We uncover a new channel of complementarity between effort and leverage that induces a correlation sign opposite to what current theoretical models predict. Second, we study the dynamics of leverage and compensation design after a credit stimulus. We derive a set of new empirical predictions. For outward-shifts in credit supply, variable compensation is increasing in leverage growth. Moreover, variable compensation increases after the credit stimulus, especially for firms with low idiosyncratic risk.Publication Credit Stimulus, Executive Ownership, and Firm Leverage(INFORMS, 2021-12-14) Gete, Pedro; Chakraborti, Rajdeep; Dahiya, Sandeep; Ge, Lei; Ministerio de Ciencia, Innovación y Universidades; Agencia Estatal de Investigación; European Regional Development Fund; https://ror.org/02jjdwm75We show that executive ownership is a significant driver of the demand for credit following credit expansion policies. Our focus on credit demand is in contrast to most studies that have focused on credit supply factors such as bank capital. Our identification exploits the large and unexpected Chinese credit expansion in 2008. This setting offers a unique advantage as in 2008 the Chinese government had almost complete control over the banking sector and it directed the banks to increase credit supply. Thus, in this setting, demand, rather than supply, largely drives the observed changes in firms’ borrowing. We provide extensive robustness tests to validate our results.Publication Decision comfort and student engagement in higher education(Routledge, 2023) Roy, Sanjit ; Japutra, Arnold; Singh, Gaganpreet; Chakraborti, Rajdeep; https://ror.org/02jjdwm75In today’s dynamic service environment,the higher education sector has maintained steady growth. The incorporation of technology in the process of teaching engages the students in the classroom,however,the students tend to indicate lower levels of engagement. Although engagement in the classroom is pivotal for student success,a robust understanding of the means to enhance student engagement is quite scarce. Thus,this study examines a robust research framework to have a better understanding of student engagement. Derived from the survey of university students,the proposed research hypotheses were tested. Results show that co-production behaviour and decision comfort are prominent drivers of student engagement. Results also show that decision comfort mediates the path between students’ goal intention and student engagement. Finally,we discuss the managerial and theoretical implications. © 2023 Informa UK Limited,trading as Taylor & Francis Group.Publication The Effects of Stimuli and News Shocks on Firms and Real Estate(IE University, 2023-02-24) Chakraborti, Rajdeep; Gete, Pedro; https://ror.org/02jjdwm75This dissertation consists of three chapters. In Chapter 1 we show that executive ownership is a significant driver of the demand for credit following credit expansion policies. Our focus on credit demand is in contrast to most studies that have focused on credit supply factors such as bank-capital. Our identification exploits the large and unexpected Chinese credit expansion in 2008. This setting offers a unique advantage as in 2008 the Chinese government had almost complete control over the banking sector, and it directed the banks to increase credit supply. Thus, in this setting, demand, rather than supply, largely drives the observed changes in Firms’ borrowing. In Chapter 2 we study a model in which leverage, and compensation are both choice variables for the firm and borrowing spreads are endogenous. We show that allowing for endogenous compensation and leverage can explain the conflicting findings of the empirical literature. We uncover a new channel of complementarity between effort and leverage that induces a correlation sign opposite to what current theoretical models predict. We also study the dynamics of leverage and compensation design after a credit stimulus. We derive a set of new empirical predictions. For outward-shifts in credit supply, greater CEO pay-performance sensitivity implies higher leverage growth. Moreover, variable compensation increases after the credit stimulus, especially for firms with low idiosyncratic risk. In Chapter 3 we study the effects of news about sea level rise on housing markets. We exploit two natural experiments in Spain. In 2007 and 2014, Greenpeace published two alarming reports predicting catastrophic consequences for La Manga, a tourist peninsula. These reports were widely cited in the local news. We find that both reports caused immediate and persistent drops in housing prices in La Manga but had no effect on housing rents. The transaction numbers in La Manga remained unchanged post 2007 report but dropped after the 2014 report. Difference-indifferences regressions with different control groups confirm the results. We find persistent drops in average transaction price in La Manga around 4% to 24% and in listing price of around 5% to 10% post publication of the reports. We also find an additional 2% to 4% drop in average transaction price in La Manga by the Spanish buyers relative to the foreign buyers. Transaction number also drops by 9% post 2014 report.