Working Papers

Working PapersAlok, Shashwat., Agarwal, Sumit.,Ghosh, Pulak.,, Saumya Ghosh.,, Tomasz Piskorski.,Seru, Amit. "Banking the Unbanked: What Do 255 Million New Bank Accounts Reveal about Financial Access?"Centre for Analytical FinanceRead Abstract >Close >Using administrative account level data, we study the largest financial inclusion program in India that led to 255 million new bank account openings. About 77% of these accounts maintain a positive balance. While the initial usage remains quite infrequent, it gradually converges to that of banked households with similar demographics. Exploiting regional variation in ex-ante financial access, we find that regions more exposed to the program saw an increase in lending and defaults on new loans. These results are consistent with banks catering to the new demand for formal credit by previously unbanked households. We also find some evidence of increased borrowing and spending for health related reasons in regions more exposed to the program.

Working PapersAlok, Shashwat., Chaurey, Ritam.,Nukala, Vasudha. "Creditor Rights, Threat of Liquidation, and Labor-Capital Choice of Firms"Read Abstract >Close >In 2002, a legal reform introduced in India allowed secured creditors to seize and liquidate the defaulter’s assets. We study firms’ choice between capital and labor in response to these strengthened creditor rights by exploiting variation in their pre-policy proportion of collateralizable assets. We find that firms increased employment, reduced their capital investments, and substituted secured formal credit with trade credit. These results are consistent with an increased threat of liquidation for firms. We find support for our main results across regions with different pre-policy court-eciency and across industries with different elasticities of substitution between capital and labor.

Working PapersPedada, Kiran., Shankar, Venkatesh.,Dass, Mayukh. "The Effects of International Marketing Joint Venture Dissolutions on the Shareholder Value of Emerging Market Firms"Read Abstract >Close >
Working PapersUppal, Abhinav., Jerath, Kinshuk.,Raju, Jagmohan S. "A Theory of Selling Formats in Retailing: Direct versus Mediated Access"Read Abstract >Close >Retailers worldwide employ various selling formats characterized by different degrees to which customers can access and inspect products in the store. In the direct access format, all available products are stocked on shelves directly accessible to customers for inspection, while store associates offer minimal assistance. In the \"mediated access\" format, retail stores are manned by shopkeepers who offer one product at a time to customers and the customers decide whether to purchase an offered product or to ask for an alternative. We build a theoretical model in which a retailer makes selling format, product assortment and pricing decisions, and consumers have shopping costs. There are two products: a general purpose brand that provides the same utility uniformly to all consumers, and a specialized brand that gives ex ante uncertain utility to a consumer that can be higher or lower than the utility of the general purpose brand, and a consumer can resolve this by inspecting this brand. We find that the retailer chooses the mediated access selling format with the specialized brand offered first when customers' uncertainty about fit with the specialized brand is large (as long as the retailer's margin on the general purpose brand is not too high). If consumers' uncertainty about fit with the specialized brand is medium, the retailer chooses to internalize consumer shopping costs by employing the direct access format and carries both brands. If consumers' uncertainty about fit with the specialized brand is small, the retailer chooses the mediated access format carrying only the general purpose brand. Our model offers an explanation for the observation that the mediated access selling format is more popular in emerging markets (as compared to developed markets) where consumers' shopping costs (e.g., cost of time) are typically small, but in these markets this format is less popular for large, organized retailers (as compared to small, unorganized retailers) that may be able to obtain better trading terms, e.g., larger retail margins, from upstream sellers.

Working PapersPedada, Kiran., Shankar, Venkatesh.,Dass, Mayukh. "Determinants of International Marketing Joint Venture Dissolutions in Emerging Markets"Read Abstract >Close >
Working PapersZerrillo, Philip. "Cross Functional Innovation: Avoiding Profit Fault Zones"Read Abstract >Close >
Working PapersBhatnagar, Navneet.,Ray, Sougata., Ramachandran, Kavil. "Building Next Generation Leadership: A Strategic Framework for Family Firms"Thomas Schmidheiny Centre for Family EnterpriseRead Abstract >Close >Developing next generation leadership is critical to sustain organisations, even more so for family controlled businesses because they are prone to failure on this count. The interplay of family and business sub-systems uniquely influences next generation leadership development strategy in family firms. Though leadership development strategy and process have been examined in extant literature, these have not been adequately researched in the family business context, particularly in an emerging economy like India. Therefore, following case methodology, we examine the next generation leadership development strategy of 15 Indian family firms and identify the pathways adopted by the incumbent and next generation leaders. We found that early strategic focus on building key capabilities and phased development process, were instrumental in a successful next generation leadership development strategy.

Working PapersBhatnagar, Navneet.,Ray, Sougata., Ramachandran, Kavil. "Decoding Family Togetherness : How Familial Bonds Shape the Family Business"Thomas Schmidheiny Centre for Family EnterpriseRead Abstract >Close >Sustaining the family business has been a core concern of family business scholars (Le Breton-Miller & Miller, 2016). Long-term survival of business is possible only when the owner family sustains as a cohesive unit. For this, strong family bonding is critical. Family ties have been probed in literature but in a fragmented manner. Moreover, the theories of family cohesion or socioemotional wealth consider family ties purely as a phenomenon of the family sub-system and examine their effect on business outcomes. We assimilate the disparate literature on familiality and conceptualize a coherent whole, termed, ‘Family Togetherness.’ We define family togetherness as the capability of the owner family to operate as a cohesive unit across both the family and business contexts. It is a ‘supra-entity’ determined by the constituent dimensions from the complex whole of the family and business sub-systems. These dimensions are rooted in the operational and governance practices followed in both the sub-systems. Using confirmatory factor analysis based on 279 survey responses from family business leaders in India, this study identifies six dimensions of family togetherness: i.e., Professionalism, Commitment, Mutual Respect, Complexity, Shared Vision, and Nurturance. The paper also discusses the implications and concludes with suggestions for future research.

Working PapersBhatnagar, Navneet., Ramachandran, Kavil. "The Influence of Familial Socio-Political Forces on New Venture Creation Strategy in Family Business"Thomas Schmidheiny Centre for Family EnterpriseRead Abstract >Close >New venture (NV) creation is critical to growth and long-term survival of business groups. In family business (FB) context, the socio-political dynamics of family sub-system influences decision-making in business sub-system. However, the effect of this phenomenon on NV creation strategy and process in family business has not been adequately examined. This paper triangulates observations from the literature and 25 in-depth interviews of FB leaders with insights from two FB practitioners, and employs abductive reasoning to theorize the influence of familial socio-political forces on NV creation strategy of family businesses. The results show that in addition to the economic rationale, the proposer’s socio-political clout in the family and the leadership's predisposition to the NV proposer are critical influences on the NV creation strategy of family businesses.

Working PapersBang, Nupur Pavan.,Vishwanthan, Anierudh., 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.

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