Doctoral scholar Ankitkumar Kariya’s paper published in Journal of Corporate Finance

The paper titled, ‘Borrowing from government-owned banks & firm’s liquidation risk’, offers a corporate finance perspective behind the build-up of non-performing assets (NPAs) in government-owned banks

A paper titled, ‘Borrowing from government-owned banks & firm’s liquidation risk’, authored by Ankitkumar Kariya, a doctoral scholar from IIM Bangalore, has been published in the Journal of Corporate Finance (JCF). JCF aims to publish high quality, original manuscripts or shorter format papers in both theoretical and empirical corporate finance.

The paper offers a corporate finance perspective behind the build-up of non-performing assets (NPAs) in government-owned banks. Government-owned banks have other explicit or implicit objectives apart from profit maximization. The paper argues these other objectives of government-owned banks constrain them in contract enforcement and reduce liquidation risk for borrowers. It provides suggestive evidence in support of this argument.