Working Papers

Working PapersBhatnagar, Navneet., Ramachandran, Kavil. "Ready, Steady, Go!’: Influence of Family Politics on New Venture Creation in Family Business"Thomas Schmidheiny Centre for Family EnterpriseRead Abstract >Close >Family firms comprise significant part of economies around the globe. Creation of new ventures (NV) is vital for their long-term survival. One of the critical success factors of a NV is the process of setting up of the venture. Yet our understanding of the ‘process’ of NV creation in family enterprise context remains limited (Vogel, 2017; Marion et al., 2015; Steier, 2009). Family as a system has its unique dynamics of socio-political pulls and pushes among its members. These forces constantly influence the functioning of the business system as well since family members are different personalities in several ways. They also exhibit varying degrees of influence on the dominant coalition. These lead to variations in the way each member is perceived and dealt with, by the top decision-makers in the family. We posit that NV creation process in family business context is influenced by socio-political forces within the family. This paper examines those socio-political forces and their influence on the NV creation process in family business. In a survey study of 120 Indian family businesses we found that familial socio-political forces significantly influence the NV creation process. Using factor analysis, we identify seven dimensions of familial socio-political influence such as Political/ Social clout and In-group/ Out-Group effects. Family embeddedness of the NV proposer was found to enhance the family’s support for the NV proposal. We conclude with the implications of the study for family firms and offer suggestions for objective assessments of NV proposals.

Working PapersRamachandran, Kavil., Bhatnagar, Navneet.,Ray, Sougata. "Togetherness in Indian Family Businesses"Thomas Schmidheiny Centre for Family Enterprise
Working PapersSubramanian, Krishnamurthy., Tantri, Prasanna.,Sarkar, Arkodipta. "Agency Costs of Personal Risk Management by Bank CEOs : Evidence Using Exogenous CEO Turnovers"Centre for Analytical FinanceRead Abstract >Close >We examine the effect of CEO turnover on earnings management in banks. Since banking is intrinsically an opaque activity, we hypothesize that an incoming CEO of a bank is more likely to manage earnings than a counterpart in a non- financial firm. To identify the hypothesized effects, we exploit exogenous variation generated by age-based CEO retirement policies in Indian public sector firms. Com- pared to banks where there is no turnover, banks experiencing CEO turnover report 23% lower profit-to-sales and 25% lower return-on-assets in the transition quarter. This decrease occurs due to increased provisions, though such provisions do not associate with increased non-performing assets subsequently. Shorter CEO tenure exacerbates earnings management by the incoming CEO. The stock price declines by 1%, and lending is 2% lower than average, which highlight the real effects of earnings management by incoming CEOs. In contrast to banks, we observe no earnings management coinciding with CEO turnover for other public sector firms. As evidence of motivation, we show that earnings management increases likelihood of directorship positions in other firms within two years of retirement.

Working PapersSubramanian, Krishnamurthy., Chakrabarti, Rajesh. "Effect of Independent Director Liability on Firm Value: Evidence from a Large Corporate Governance Failure"Read Abstract >Close >
Working PapersSubramanian, Krishnamurthy. "Once Bitten Twice Shy: Learning from Failed Acquisitions"Read Abstract >Close >
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