IDEAS home Printed from https://ideas.repec.org/p/npf/wpaper/18-247.html
   My bibliography  Save this paper

Value Destruction and Wealth Transfer under the Insolvency and Bankruptcy Code, 2016

Author

Listed:
  • Datta, Pratik

    (National Institute of Public Finance and Policy)

Abstract

India experienced a major structural change with the enactment of the Insolvency and Bankruptcy Code, 2016. Since then, India's ranking under the Insolvency head in the World Bank Group's Doing Business report has sharply risen from 136 to 103. India was also awarded the Global Restructuring Review (GRR) Award for the Most Improved Jurisdiction in restructuring and insolvency regime. Yet, the Insolvency and Bankruptcy Code, 2016 has also raised two important concerns - the value destruction problem and wealth transfer problem. This article applies theoretical concepts from the law and economics literature on insolvency to identify the sources of these two problems in insolvency law. It then applies these theoretical concepts to the Insolvency and Bankruptcy Code, 2016 to identify two potential sources of the value destruction problem and four potential sources of the wealth transfer problem in the law. Indian policymakers need to revisit some of the fundamental legislative design choices embedded within the Insolvency and Bankruptcy Code, 2016 to successfully address these very sources of the value destruction and wealth transfer problems.

Suggested Citation

  • Datta, Pratik, 2018. "Value Destruction and Wealth Transfer under the Insolvency and Bankruptcy Code, 2016," Working Papers 18/247, National Institute of Public Finance and Policy.
  • Handle: RePEc:npf:wpaper:18/247
    Note: Working Paper 247, 2018
    as

    Download full text from publisher

    File URL: https://www.nipfp.org.in/media/medialibrary/2018/12/WP_247.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Bailey, Rishab & Parsheera, Smriti & Rehman, Faiza & Sane, Renuka, 2018. "Disclosures in privacy policies: Does "notice and consent" work?," Working Papers 18/246, National Institute of Public Finance and Policy.
    2. Rajeswari Sengupta & Anjali Sharma & Susan Thomas, 2016. "Evolution of the insolvency framework for non-financial firms in India," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2016-018, Indira Gandhi Institute of Development Research, Mumbai, India.
    3. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
    4. Ranjan K. Mohanty & N. R. Bhanumurthy, 2019. "Analyzing the Dynamic Relationships between Physical Infrastructure, Financial Development and Economic Growth in India," Asian Economic Journal, East Asian Economic Association, vol. 33(4), pages 381-403, December.
    5. Kaur, Amandeep & Chakraborty, Lekha, 2018. "UDAY Power Debt in Retrospect and Prospects: Analyzing the Efficiency Parameters," Working Papers 18/244, National Institute of Public Finance and Policy.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ila Patnaik & Shalini Mittal & Radhika Pandey, 2019. "Examining the Trade-Off Between Price and Financial Stability in India," Working Papers id:12979, eSocialSciences.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Pratik Datta, 2019. "Value Destruction and Wealth Transfer Under the Insolvency and Bankruptcy Code, 2016," Working Papers id:12965, eSocialSciences.
    2. Patnaik, Ila & Mittal, Shalini & Pandey, Radhika, 2019. "Examining the trade-off between price and financial stability in India," Working Papers 19/248, National Institute of Public Finance and Policy.
    3. Barbara Su, 2023. "Banking practices and borrowing firms’ financial reporting quality: evidence from bank cross-selling," Review of Accounting Studies, Springer, vol. 28(1), pages 201-236, March.
    4. Yeon‐Koo Che & Kathryn E. Spier, 2008. "Strategic judgment proofing," RAND Journal of Economics, RAND Corporation, vol. 39(4), pages 926-948, December.
    5. Klapper, Leora F. & Love, Inessa, 2004. "Corporate governance, investor protection, and performance in emerging markets," Journal of Corporate Finance, Elsevier, vol. 10(5), pages 703-728, November.
    6. Hartarska, Valentina M. & Nadolnyak, Denis A., 2012. "Financing Constraints and Access to Credit in Post Crisis Environment: Evidence from New Farmers in Alabama," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124882, Agricultural and Applied Economics Association.
    7. Hasan, Iftekhar & Lozano-Vivas, Ana, 2002. "Organizational Form and Expense Preference: Spanish Experience," Bulletin of Economic Research, Wiley Blackwell, vol. 54(2), pages 135-150, April.
    8. Fabbri, Daniela & Menichini, Anna Maria C., 2016. "The commitment problem of secured lending," Journal of Financial Economics, Elsevier, vol. 120(3), pages 561-584.
    9. Sang Cheol Lee & Mooweon Rhee & Jongchul Yoon, 2018. "Foreign Monitoring and Audit Quality: Evidence from Korea," Sustainability, MDPI, vol. 10(9), pages 1-22, September.
    10. Lu, Yao & Zhan, Shuwei & Zhan, Minghua, 2024. "Has FinTech changed the sensitivity of corporate investment to interest rates?—Evidence from China," Research in International Business and Finance, Elsevier, vol. 68(C).
    11. DEGEORGE, François & DING, Yuan & JEANJEAN, Thomas & STOLOWY, Hervé, 2005. "Does Analyst Following Curb Earnings Management?," HEC Research Papers Series 810, HEC Paris.
    12. Xueyan Dong & Jingyu Gao & Sunny Li Sun & Kangtao Ye, 2021. "Doing extreme by doing good," Asia Pacific Journal of Management, Springer, vol. 38(1), pages 291-315, March.
    13. Gerry Gallery & Emerson Cooper & John Sweeting, 2008. "Corporate Disclosure Quality: Lessons from Australian Companies on the Impact of Adopting International Financial Reporting Standards," Australian Accounting Review, CPA Australia, vol. 18(3), pages 257-273, September.
    14. Baarda, James R., 2003. "Current Law & Economics Debates: Tools for Assessing Fundamental Cooperative Changes?," 2003 Annual Meeting, October 29 31802, NCERA-194 Research on Cooperatives.
    15. Khémiri, Wafa & Noubbigh, Hédi, 2020. "Size-threshold effect in debt-firm performance nexus in the sub-Saharan region: A Panel Smooth Transition Regression approach," The Quarterly Review of Economics and Finance, Elsevier, vol. 76(C), pages 335-344.
    16. Shaikh, Ibrahim A. & O'Brien, Jonathan Paul & Peters, Lois, 2018. "Inside directors and the underinvestment of financial slack towards R&D-intensity in high-technology firms," Journal of Business Research, Elsevier, vol. 82(C), pages 192-201.
    17. Calcagno, R. & Renneboog, L.D.R., 2004. "Capital Structure and Managerial Compensation : The Effects of Renumeration Seniority," Discussion Paper 2004-120, Tilburg University, Center for Economic Research.
    18. Maha Faisal Alsayegh & Rashidah Abdul Rahman & Saeid Homayoun, 2020. "Corporate Economic, Environmental, and Social Sustainability Performance Transformation through ESG Disclosure," Sustainability, MDPI, vol. 12(9), pages 1-20, May.
    19. Preet Singh & Chitra Singla, 2016. "Executive Stock Options: Will it Work as a Good Governance Mechanism in all Scenarios?," Working Papers id:10985, eSocialSciences.
    20. Cécile Cézanne, 2012. "Berle and Means," Chapters, in: Michael Dietrich & Jackie Krafft (ed.), Handbook on the Economics and Theory of the Firm, chapter 7, Edward Elgar Publishing.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:npf:wpaper:18/247. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: S.Siva Chidambaram (email available below). General contact details of provider: http://www.nipfp.org.in .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.