However both through various crisis (for example, the South Asian financial crisis of late 90s) as well as the recoveries of these economies, and their financial markets from global crisis (For example that of the last financial crisis of 2007-2009) much earlier than their western counter parts, have proven that emerging markets are fundamentally different structurally as well as functionally.
Certainly, at the immediate aftermath of the recent financial crisis, emerging economies like India and China are proving to be more promising destinations for foreign investments, and that also in myriads of ways. For example, through huge FDI flows, FII flows, mega Mergers and Acquisitions (both ways, i.e. there is a growing pattern of emerging market firms buying out large foreign Corporates in the ways of LBOs, TATAs acquisition spree since later half of 2000 can be a good example), and also through investments in emerging derivative markets of such economies.
Hence given this back drop it is extremely exiting to study the emerging financial markets, both to understand the critical structural features which set them apart from the developed markets, as well as to study the short comings of such markets, so that structural policies can be suggested for building stronger financial systems in future. There are no doubts many so called frictions existing in emerging markets. Less liquidity, higher degree of information asymmetry problems (for example adverse selection and moral hazard problems in emerging financial markets including markets for corporate control), need of better and more transparent regulations, better monitoring and regulatory mechanisms all are the need of the hour.
However the challenge is to design so called indigenous mechanism designs to alleviate such problems, rather than mimicking the standard text book solutions. For example, one such indigenous route has been the excellent growth of microfinance institutions since the Grameen Bank revolution in Bangladesh. Obviously, there are many critics of market failures in this area too (Banarjee and Daflou, 2012). However there is no doubt that such indigenous networks are very much needed to rekindle/ stimulate the small and medium enterprises. Hence group lending or studying microcredit in emerging economies is a very sought after research area today (Ghatak, 2015).
However in the Indian context there is a scarcity of good research centers devoted to studying all such relevant aspects of financial system in India and emerging financial markets as a whole. There are public / Government aided research centers, where the focus is more traditional, for example solving public good provisions. Hence there is a dire need for the development of a financial market focused research center, where both public and private sector perspectives can be up held.
It is here where Jindal Global Business School is aiming to bridge the lacuna by proposing a devoted research center on financial markets for emerging economies, with a deep focus on Indian financial system.
Developing a comprehensive research team on studying potentials and structural problems in financial markets in emerging economies, for example, south East Asian economies, and GCC countries, with specific focus to developing equity, bond and derivative markets.
- Collaborating with partner institutions abroad for organizing conferences (in-house, potentially) where comparative studies of financial systems can be done and relevant papers can be presented for future publications.
- Developing research groups based on more focused/ niche areas, for example, M&A and corporate restructuring in India, where again collaboration should be aimed at with the partner institutes which have specific research centers for M&A activities (such specific research centers are proliferating global universities rapidly).
- Developing a research group on micro credit and SME finance for Indian context.
- Perhaps most critically developing much needed data bases for financial market variables in India and emerging economies. This can be a profound contribution by JGBS, since lack of good data bases is a big hindrance to research in Indian context. Here too international expertise can be sought. Data bases like BLOOMBERG, Thomson Reuters, and Data Stream can be used/ availed. Here PhD scholars can also be allocated tasks, for example completing courses like BLOOMBERG market champion, and then applying such acumen in research.
- Developing/ installing good soft wares, for example STATA which can be accessed by all researchers for producing quality outputs.
- Potentially an in-house journal launch focused on the area in near future.
Key Activities of the Center
The center will have following key activities
- Staging regular conferences, whether through collaborations or in-house, where leading experts from across globe will be invited to present papers, findings, policy recommendations, and further suggestions to enhance research activities of the center.
- Workshops to be arranged regularly focused on research data base uses and use of specific soft wares. Professional services like BLOOMBERG can be availed here, since BLOOMBERG has emerged as the leading data provider in financial markets, and M&A over the globe.
- MDP trainings which can be provided by the expert faculty members focused on capital markets, portfolio optimization, option pricing under indigenous contexts.
- Guest lectures to be arranged from universities in the country as well as abroad. Guest speakers can be approached through faculty networks and collaborations.
- Overall our data driven research will have the objectives to inspire, innovate and impact the real world.
Overall we aspire to be a world class research center with a sharp focus in creating a comprehensive data driven research group, which can make its impact felt in the research world.