Working Papers

Working PapersBang, Nupur Pavan.,Bhatia, Nandil.,Ray, Sougata., Ramachandran, Kavil. "Pledging of Shares and Primary Shareholders: Antecedents to the Decision to Pledge"Thomas Schmidheiny Centre for Family EnterpriseRead Abstract >Close >While borrowing funds through share pledging (offering shares as collateral by primary shareholders to avail loans from financial institutions) is widespread in many institutional contexts, research on the causes and consequences of this corporate governance phenomenon is limited. We examine the influence of firm ownership (family or non-family), business group affiliation and size of business group on the decision to pledge shares. We find that business group affiliation and family ownership have a positive impact, while business group size has a negative impact on both likelihood and propensity to pledge shares in affiliates.

Working PapersBhatnagar, Navneet., Ramachandran, Kavil., Chittoor, Raveendra. "Taking Governance to the Next Level: Learnings from the Case of Merck"Thomas Schmidheiny Centre for Family Enterprise
Working PapersBhatnagar, Navneet.,Ray, Sougata., Ramachandran, Kavil. "Developing the Next Generation Leadership in Family Business"Thomas Schmidheiny Centre for Family EnterpriseRead Abstract >Close >Effective leadership transitions across generations are crucial for long-term sustenance of family business - the dominant form of business organisation across the world. Yet, most family businesses struggle to survive beyond three generations. Weak next-generation leadership is a major reason attributed for this failure. Existing leadership-development frameworks do not take into account the peculiarities of family business context. We analyse next-generation leadership development pathways adopted by 15 large Indian family businesses and present a framework for developing next-generation family business leaders.

Working PapersBang, Nupur Pavan., Ramachandran, Kavil. "Evidence on Family Firm Performance and Relevance of Context in an Emerging Economy"Thomas Schmidheiny Centre for Family EnterpriseRead Abstract >Close >Ownership of firms and their impact on firm performance has been a topic of interest for long. Concentrated ownership of a firm in the hands of a family presents unique opportunities and challenges that may have an impact on the performance of the firm. Multiple studies have arrived at differing conclusions with regards to performance of family firms. Using a unique proprietary database of scientifically classified listed family and non-family firms this paper studies the impact of family ownership, control and management on firm performance through the lens of external and internal context. It thus advances the debate that has so far been skewed towards studies from the developed markets, larger firms and micro analysis. Using accounting and market measures of firm performance, we conduct a time-series cross-sectional comparison of family and non-family firms. Our analyses consistently reveal that family firms performed poorly in comparison to non-family firms in India. We also find that the impact of family does not weaken over time and that family management results in poorer performance. We, therefore, conclude that family ownership, control and management per se are a significant impediment to firm performance in emerging markets contexts like India.

Working PapersRamachandran, Kavil., Bhatnagar, Navneet.,Ray, Sougata. "Gridlock that Family Firms Build for Themselves"Thomas Schmidheiny Centre for Family EnterpriseRead Abstract >Close >One of the main reasons for family business failure is the inability to manage the challenges that arise from the growing complexities of the intertwined business and family systems. Though scholars have studied the challenges of growing business complexity, the effect of its interplay with the growing family complexity has not been adequately examined. Using multiple-case study method in the Indian family business context, this paper examines the interplay of the increasing complexity in both the systems. The paper finds that family businesses get trapped in a decision-making gridlock that they themselves create without being consciously aware about it. The paper identifies five stages of the decision-making gridlock and also suggests how family businesses can avoid the gridlock trap.

Working PapersBang, Nupur Pavan.,Ray, Sougata., Ramachandran, Kavil. "Parenting among Business Groups: An Emerging Market’s Perspective"Thomas Schmidheiny Centre for Family EnterpriseRead Abstract >Close >This paper explores the heterogeneity among family businesses by demarcating business group affiliated family firms from standalone family firms. Advantages associated with superior parenting by the promoting family of business group affiliated firms have been linked with the corporate strategy literature to explain their superior performance in an emerging market. Two proxies have been used to measure the extent of parenting namely, firm leadership by a family member and promoting family’s shareholding in the group affiliate company. The study has been conducted in the Indian economic context using a dataset consisting of 3,728 listed companies. Results show that business group affiliation has a positive impact on financial performance. Also, superior parenting realized by non-family firm leadership and higher promoter shareholding leads to superior financial performance among family business group firms as compared to standalone family firms.

Working PapersChittoor, Raveendra.,Bang, Nupur Pavan., Ramachandran, Kavil. "Women on Boards in Family Firms"Thomas Schmidheiny Centre for Family EnterpriseRead Abstract >Close >In this paper, we examine the heterogeneity in the adoption of new corporate governance norms between family firms and non-family firms in the specific context of induction of women directors onto corporate boards. We do so by exploiting a regulation introduced in 2013 in India that required companies to induct at least one woman director on the board within a year. Using panel data from 1507 publicly listed firms, we find that there is no significant difference in the proportion of women directors between family firms and non-family firms. We further distinguish family firms into stand-alone firms and firms belonging to family-owned business groups and find that women director proportion and the proportion of executive women directors is higher in stand-alone family firms.

Working PapersChittoor, Raveendra.,Bang, Nupur Pavan., Ramachandran, Kavil., Basuthakur, Yashodhara. "Do Family Firms Comply to CSR Regulation: An Empirical analysis of Listed Firms in India."Thomas Schmidheiny Centre for Family EnterpriseRead Abstract >Close >The study investigates the compliance of family firms to the mandatory corporate social responsibility (CSR) regulation passed by the Government of India in year 2013. We test the CSR compliance of family and non-family firms and then examine the heterogeneity within family firms measured by family ownership and management. The study also looks at the specific areas of CSR spent, mode of implementation, effect of institutional shareholding, and the presence of women directors. Using a distinct and improved source of data on corporate social responsibility, this paper empirically shows that family firms and corporate social responsibility are positively associated. It supports the theory that family firms engage in social initiatives to enhance their socioemotional wealth and respond to stakeholder claims.

Working PapersBhatnagar, Navneet.,Mantravadi, Bharagavi., Ramachandran, Kavil. "Firm-Level Drivers of Environmental Sustainability Strategy of Indian Family Firms."Thomas Schmidheiny Centre for Family EnterpriseRead Abstract >Close >Climate change has emerged as the most urgent problem of our times. Repeated calls have been made to businesses to adopt environmental sustainability strategy. However, businesses continue to struggle. Pressure from regulators and external stakeholders have forced developed market firms to adopt sustainability strategy. However, emerging markets have weak regulations and institutional voids. Therefore, emerging market firms are likely to lack effective environmental sustainability strategy. Family controlled firms dominate economies across the world. Due to their community embeddedness family firms may emerge as central players in confronting environmental challenges. Examining 10 large Indian family firms included in the Dow Jones Sustainability Index, this study identifies firm-level, internal motivations for adopting environmental sustainability strategy and green practices by family firms. The proposal also discusses practical implications.

Working PapersChopra, Yakshup.,Nagpurnanand, Prabhala., Tantri, Prasanna. "Bank Accounts for The Unbanked: Evidence from a Big Bang Experiment"Centre for Analytical Finance
Working PapersRajagopal, Shivaram., Tantri, Prasanna. "Does Mandated Corporate Social Responsibility Reduce Intrinsic Motivation? Evidence from India"Centre for Analytical FinanceRead Abstract >Close >
Working PapersTantri, Prasanna., Thirumalai, Ram.,Subramaniam, KR.,Agrawal, Deepak. "Do Derivatives matter? Evidence from a policy experiment"Centre for Analytical Finance
Working PapersTantri, Prasanna., Thirumalai, Ramabhadran.,Jain, Ankit. "Does Capital Move Slowly Towards Investment Opportunities - Evidence From An Exogenous Supply Shock"Centre for Analytical Finance
Working PapersTantri, Prasanna. "Fintech for the Poor: Financial Intermediation Without Discrimination"Centre for Analytical Finance
Working PapersTantri, Prasanna., Agarwal, Vikas.,Desai, Mohit. "How do Small investors Impact Derivative Markets? Evidence from a Policy Experiment"Centre for Analytical Finance
Working PapersTantri, Prasanna. "Identifying Zombie Lending: Evidence Using Loan-Level Data"Centre for Analytical Finance
Working PapersTantri, Prasanna., Agrawal, Deepak.,Subramaniam, KR.,Thirumalai, Ram. "Impact of Securities Transaction Tax"Centre for Analytical Finance
Working PapersTantri, Prasanna. "Impact of Third Party Audits on Compliance and Corruption: Evidence Using a Policy Experiment"Centre for Analytical Finance
Working PapersTantri, Prasanna., Mishra, Mrinal.,Jain, Ankit. "Noise Trader Activity in Capital Markets: Gleaning Insights from the Futures Market"Centre for Analytical Finance
Working PapersTantri, Prasanna., Subramanian, Krishnamurthy., Chopra, Yakshup. "Operation Successful but Patient Dead: Bank Clean-up during Normal Times "Centre for Analytical Finance
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