Does Bankruptcy Reforms Enhance Firm Performances for Politically Connected Firms? Evidence from India
Kousik Ganguly,
Ajay Kumar Mishra
Abstract:Using a sample of 1,953 listed firms on the National Stock Exchange from 2009 to 2021, we investigate whether politically connected firms alter their cash holding patterns following the Insolvency and Bankruptcy Code (IBC) reforms introduced in 2016. We also examine the impact of changes in a firm’s cash holdings on its performance. Results show that politically connected firms reduced their cash holdings following the implementation of IBC in 2016, as new reforms better protected creditors through strict enfo… Show more
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