Arkodipta Sarkar

Assistant Professor of Finance

Hong Kong University of Science and Technology (HKUST)


Research Areas: Empirical Corporate Finance. I study the interactions between politics, policy, and culture on financing and investment.

Curriculum Vitae


Experience of Communal Conflict and Inter-group Lending, with Raymond Fisman, Janis Skrastins and Vikrant Vig

Journal of Political Economy 128.9 (2020): 3346-3375.

Effects of CEO Turnover in Banks: Evidence Using Exogenous Turnovers in Indian Banks , with Krishnamurthy Subramanian and Prasanna Tantri

Journal of Financial and Quantitative Analysis 54.1 (2019): 183-214.

Working Papers

Firm Boundaries and Political Uncertainty: Evidence from State Elections in India

Cubist Systematic Strategies Ph.D. Candidate Award for Outstanding Research, WFA 2017

Abstract: Using subsidiary-level data for Indian firms and staggered elections across Indian states, this paper finds that political uncertainty's impact on firm performance varies by organizational form. The analysis builds on the idea that a firm belonging to a conglomerate, when exposed to political uncertainty is co-insured by other firms of the group. In states with imminent elections, I find stand-alone firms have relatively low leverage and high borrowing cost. The impact, however, is attenuated for stand-alones with lesser borrowing constraints. The results are consistent with being driven largely by the (reduced) supply than (subdued) demand for capital.

Conferences: WFA 2017, AFA PhD Poster session 2017, LBS Trans-Atlantic Doctoral Conference 2017, ISB Summer Research Conference 2017, CICF 2018, IIM Calcutta Financial Research Workshop, 2018, ABFER 2021

Policy Uncertainty, Multinational Firms, and Reallocation

Best Paper Award (CAF Summer Conference, Indian School of Business 2020)

Abstract: Multinationals are often considered a tool through which economic shocks originating in a region get magnified. This paper, in contrast shows that elevated economic policy uncertainty (EPU) in a country is associated with increase in investment by a firm in other regions. I find that (multinational) firms hold back investment in a country subjected to higher EPU which they reallocate to projects in other countries. I find the impact to be higher for firms with tighter financial constraint. I also find the reallocation is directed more towards countries that provide a better legal environment. The study uses establishment-level data of mining firms as a laboratory. Limited input-output linkage across mines allows me to study the impact caused particularly through the allocation decision of firms. The empirical strategy exploits the variation in: i) parent country of mines operating in the same country; & ii) country of operation of mines owned by same firm. Overall my findings highlight that multinationals could potentially stabilize the escalation of regional policy uncertainty shocks to global crisis.

Conferences: HEC Paris Finance PhD Workshop 2019, LBS PhD Alumni Workshop 2019, Trans-Atlantic Doctoral Conference 2019 , CAF Summer Conference, Indian School of Business 2020, NFA 2021, AFA 2022

Political Voice and (Mortgage) Market Participation: Evidence from Minority Disenfranchisement with Seongjin Park and Nishant Vats

Abstract: This paper documents the link between political voice and economic decision-making. Combining the repeal of Section 5 of the Voting Rights Act as a shock to the enfranchisement of black Americans with granular data on the US mortgage market, we document a 14% decline in mortgage origination for black Americans. This is driven by their self-selection out of the mortgage market rather than a change in denial rate. Additionally, we observe a flight of black demand to black lenders, indicating an increase in racial homophily. Our results indicate that disenfranchisement reduces demand directly by increasing uncertainty, violence, and borrowing constraints and indirectly by increasing the threat of rejection.

Conferences: Trans-Atlantic Doctoral Conference 2021, CAF Summer Conference, Indian School of Business 2021, AFA 2022

Political Power-Sharing, Firm Entry, and Economic Growth: Evidence From Multiple Elected Representative with Harsha Dutta, Pulak Ghosh and Nishant Vats

NYU-NSE Initiative for Emerging Market Studies (Research Grant)

Abstract: Should political institutions concentrate power in more hands or a single hand? This paper provides microeconomic evidence on the relationship between multiple elected representatives and economic growth. We find that increasing the number of politicians governing an area leads to greater firm entry and real economic activity. The identification strategy exploits uneven overlap of electoral and administrative boundaries, leading to a quasi-random variation in the number of politicians governing adjacent administrative units. This setup allows us to implement a geographic regression discontinuity design across boundaries separating a split (multiple politicians) unit from an unsplit (single politician) unit. Greater state efficiency, lower regulatory costs, and reduced cronyism due to increased checks and balances among multiple non-aligned politicians is the primary driver of higher firm entry.