Anand Jha published in Journal of Financial and Quantitative Analysis
Associate Professor of Finance Anand Jha had an article accepted for publication in the Journal of Financial and Quantitative Analysis (JFQA).
The article is titled "Quiet life no more? Corporate bankruptcy and bank competition," and it was co-authored with Todd Gormley of Washington University in St. Louis and Nandini Gupta of Indiana University.
The top-ranked JFQA publishes peer-reviewed theoretical and empirical research in financial economics. Topics include corporate finance, investments, capital and security markets, and quantitative methods of particular relevance to financial researchers.
Abstract
Pursuing delinquent borrowers requires considerable effort, and creditors may lack the incentive to exert this costly effort in uncompetitive banking sectors. To examine this, we use a uniquely large dataset of public and private corporate bankruptcy filings spanning a banking-sector reform that deregulated bank entry across different regions of India. We find that increased banking competition is associated with more firms seeking a stay on assets, a decline in bankruptcy duration, and a shift towards workouts rather than liquidations. The results are consistent with creditors exerting greater effort to pursue delinquent firms and resolve bankruptcies more quickly when competition increases.
