Top Research Papers on Finance in India

This research study analytically investigates the influence of green finance and financial technology on sustainable economic growth. The analysis is based on data from Indian states from 2010 to 2021. The research paper uses the panel regression method to examine the association between fintech, green finance and economic growth by applying a two-step GMM (generalized model of moments) to determine the endogeneity issues of the variables. This paper reveals that green finance widely helps quality economic growth by significantly impacting finance structure, financial effectiveness, and enviro...

This research study is one of the significant to offer an inclusive investigation of the impact of green finance correlated policies by applying text analysis approach and panel data from 28 states and 8 union territories between 2010 and 2020. The paper uses the SDID and illustrates that overall, India's green finance associated with policies have directed a substantial decrease in industrial CO2 emissions during the study period. Furthermore, the paper determined that the Fintech growth pays to the reduction of SO2 (sulfur dioxide) emissions and positively influences environmental safety and...

Abstract Biodiversity conservation will supersede climate change risk mitigation and adaptation as the next grand challenge for sustainable finance. Closing the financing gap between what is currently spent and what is needed to be spent over the next 10 years to mobilize private investment to maintain ecosystem integrity and biodiversity, and the services they provide, is estimated to exceed hundreds of billions per year. Yet there are no studies in the top tier journals in finance that have framed the risks related to biodiversity loss, how those risks might be priced, or how the private fin...

ABSTRACT DeFi (‘decentralized finance’) has joined FinTech (‘financial technology’), RegTech (‘regulatory technology’), cryptocurrencies, and digital assets as one of the most discussed emerging technological evolutions in global finance. Yet little is really understood about its meaning, legal implications, and policy consequences. In this article we introduce DeFi, put DeFi in the context of the traditional financial economy, connect DeFi to open banking, and end with some policy considerations. We suggest that decentralization has the potential to undermine traditional forms of accountabili...

Abstract Sustainable finance—the integration of environmental, social, and governance (“ESG”) issues into financial decisions—is an increasingly important topic. Within companies, sustainability is no longer an ancillary issue confined to corporate social responsibility departments, but a CEO-level issue fundamental to the core business. Within the investment industry, sustainability used to be the exclusive domain of “socially responsible investors” who had social as well as financial objectives, but is now mainstream and includes investors with purely financial goals. This article introduces...

Abstract Financial market imperfections can have significant impact on employment decisions of firms. We illustrate the economic importance of this channel by showing that employment decisions are constrained by firms’ financial health and liquidity. Our main analysis uses a collage of three “quasi-experiments” to trace the effects of finance on employment. The results suggest that financial constraints and the availability of credit play an important role in firm-level employment decisions, as well as aggregate unemployment outcomes.

In this article, we review the literature studying interactions between climate change and financial markets. We first discuss various approaches to incorporating climate risk in macrofinance models. We then review the empirical literature that explores the pricing of climate risks across a large number of asset classes, including real estate, equities, and fixed income securities. In this context, we also discuss how investors can use these assets to construct portfolios that hedge against climate risk. We conclude by proposing several promising directions for future research in climate finan...

We review an empirical literature that studies the role of social interactions in driving economic and financial decision-making. We first summarize recent work that documents an important role of social interactions in explaining household decisions in housing and mortgage markets. This evidence shows, for example, that there are large peer effects in mortgage refinancing decisions and that individuals’ beliefs about the attractiveness of housing market investments are affected by the recent house price experiences of their friends. We also summarize recent work showing that social interactio...

Household financial decisions are complex, interdependent, and heterogeneous, and central to the functioning of the financial system. We present an overview of the rapidly expanding literature on household finance (with some important exceptions) and suggest directions for future research. We begin with the theory and empirics of asset market participation and asset allocation over the life cycle. We then discuss household choices in insurance markets, trading behavior, decisions on retirement saving, and financial choices by retirees. We survey research on liabilities, including mortgage choi...

Using the panel data of A-share listed companies from 2011 to 2020, we demonstrate that the WW index can characterize the level of enterprise financing constraints in China more effectively. We investigate the effect of regional digital finance (DF) development on enterprise financing constraints. This study found that DF can significantly alleviate enterprise financing constraints, and the effect is greater for small and medium-sized enterprises (SMEs) and private enterprises. DF can partially correct the size discrimination and ownership discrimination of traditional finance on private SMEs,...

This paper investigates the effects of financing constraints on prompting green innovations using a sample of Chinese listed firms in the period 2001–2017. Also, we explore how green finance policies resolve financing constraints of firms to green innovation. The capability of green innovation is found to be impaired when firms face higher financing constraints, and privately owned enterprises tend to be more vulnerable than state-owned ones in this regard. Although green finance policies can effectively ease financing restraints on green innovation overall, green credits are less likely to be...

The classical techniques used by the financial industry is outlined and the potential advantages and limitations of quantum techniques are discussed, as well as challenges that physicists could help tackle.

To date, scholars working in the area of behavioral finance have mostly focused on asset pricing and portfolio theory, but less so in corporate finance. In this paper, I propose a conceptual framework for applying behavioral ideas to the main topics which comprise corporate finance, and call the approach “behavioral corporate finance.” There are two key behavioral impediments to the process of value maximization, one internal to the firm and the other external. I call the first impediment behavioral costs. In this respect, the behavioral corporate approach deals with four cases or categories, ...

This book introduces machine learning methods in finance. It presents a unified treatment of machine learning and various disciplines in quantitative finance, with an emphasis on how theory and hypothesis tests inform the choice of algorithm for financial data modeling and decision making.

This article examines the role of sustainable finance and investment in Japan and how the Japanese financial sector can mitigate growing climate risks and support Japan's transition towards a zero-carbon, sustainable economy. It first illustrates Japan's exposure to physical and transitional climate risks before reviewing emerging practices in sustainable finance. These include the growing importance of environmental, social, and governance (ESG) criteria in financial decision-making; more rigid reporting and disclosure standards; and the development of green bond and sustainable investment ma...

Textual analysis, implemented at scale, has become an important addition to the methodological toolbox of finance. In this review, given the proliferation of papers now using this method, we first provide an updated survey of the literature while focusing on a few broad topics—social media, political bias, and detecting fraud. We do not attempt to survey the various statistical methods and instead initially focus on the construction and use of lexicons in finance. We then center the discussion on readability as an attribute frequently incorporated in contemporaneous research, arguing that its ...

This article starts from the premise that International Political Economy (IPE) literature – with some notable exceptions – has a blind spot for the colonial and contested histories of financial infrastructures. Often considered to be the mere ‘plumbing’ of international finance, financial infrastructures instead are profoundly political and rooted in long-term colonial histories. To start addressing these blind spots, the article draws on literatures in critical infrastructure studies, that offer understandings of infrastructure as lively, contested and profoundly political. The argument is t...

Our legacy financial infrastructure has both limited growth opportunities and contributed to the inequality of opportunities. Around the world, 1.7 billion are unbanked. Small businesses, even those with a banking relationship, often must rely on high-cost financing, such as credit cards, because traditional banking excludes them from loan financing. High costs also impact retailers who lose 3% on every credit card sales transaction. These total costs for small businesses are enormous by any metric. The result is less investment and decreased economic growth. Decentralized finance, or DeFi, po...

The immutable refrain ‘change is the only constant’ serves as both cautionary and aspirational catchphrase. Our social environment is changing; improving on average globally, but with benefits dist...

Abstract We study how countries’ financial structure affects their transition to low-carbon growth. Using global industry-level data, we document that carbon-intensive industries reduce emissions faster in economies with deeper stock markets. The main channel underpinning this stylised fact is that stock markets facilitate green innovation in carbon-intensive sectors, resulting in lower carbon emissions per unit of output. More tentative evidence indicates that stock markets also help to reallocate investment towards more energy-efficient sectors. Cross-border spillovers are limited: less than...