Template-Type: ReDIF-Paper 1.0
Author-Name: Biswajit Banerjee
Author-Name-First: Biswajit
Author-Name-Last: Banerjee
Author-Email: biswajit.banerjee@ashoka.edu.in
Author-Workplace-Name: Ashoka University
Author-Name: Risto  Herrala
Author-Name-First: Risto 
Author-Name-Last: Herrala
Author-Email: 
Author-Workplace-Name: The Bank of Finland Institute for Emerging Economies
Title: Testing the impact of liquidation speed on leverage using Indian data
Abstract: The paper investigates the influence of the speed of liquidation of insolvent firms on leverage. The theoretical model presented formalizes the intuitive view that an
increase in liquidation speed is expected to decrease average leverage as highly leveraged firms exit. Analysis of Indian data, however, suggests that an increase in liquidation speed increases average leverage. This finding is linked to influential observations at the right tail of the leverage distribution. We propose an asset-weighted variant of the proposition that holds with empirical data.
length: 23
Creation-Date: 20240430
Revision-Date: 
Publication-Status: 
File-URL:https://dp.ashoka.edu.in/ash/wpaper/paper113_0.pdf
File-Format: Application/pdf 
Number: 113
Keywords: Indian economy
Keywords: Insolvency and bankruptcy code
Keywords: Leverage
Keywords: Liquidation speed
Handle: RePEc:ash:wpaper:113