Faculty Publications

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    Corporate governance and financial distress: Evidence from Indian companies
    (Serials Publications serialspublications@vsnl.net, 2016) Devji, S.; Suprable, K.R.; Krishnaprasad
    There is no business without ups and down, even well-established firms will fail if they delay in responding changes in business environment effectively. It becomes very difficult to defend themselves against competitors' new products, mode of services, or strategies, they watch their sales and profits erode, their best people leave, and their stock valuations tumble. Few firms ultimately manage to recover gradually after painful rounds of downsizing and restructuring but many wont.Why do successful companies will fail? It's often assumed that the problem is paralysis. Confronted with a disruption in business conditions, companies freeze; they're caught like the proverbial deer in the headlights. But that explanation doesn't fit the facts. In studying once-thriving companies that have struggled in the face of change, study found little evidence of paralysis. Quite the contrary. The frustrating truth is that we don't comprehend corporate breakdowns nearly as well as we understand other crises, such as human disease. The paper examines certain aspects of corporate governance in the Indian listed companies and their impact on financial distress using a sample of 350 Indian listed companies for a period of 2010 - 2014 using matched pair research design. The industry, total assets and the accounting period was taken into consideration to match the non-distressed firms to the distressed firms. Similar with earlier research, the study indicates that board size, proportion of independent directors to total directors and non-institutional investors are major governance factors which influence the company's distress level. © Serials Publications.
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    Influence of financial distress on exchange rate exposure: Evidence from India
    (Inderscience Publishers, 2018) Prasad, K.; Suprabha, K.R.; Devji, S.
    This paper investigates the relationship between exchange rate exposure and level of financial distress. We argue that the exchange rate movements have a higher effect on the value of the firms with higher level of financial distress. The effect of other firm level variables such as profitability, size of the firm, foreign sales and expenses and liquidity on exchange rate exposure were also studied. We use Merton's (1974) structural default model to estimate firms' distance to default as a proxy for their probability of financial distress. A sample 387 firms listed in National Stock Exchange (NSE) is studied for a period of 2012-2016. We find that the level of firms' exchange rate exposure is significantly positively related to distance to default, indicating that firms that have a greater probability of financial distress are more affected by exchange rate movements. © © 2018 Inderscience Enterprises Ltd.
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    The impact of ESG disclosure on mitigating financial distress: exploring the moderating role of firm life cycle
    (Palgrave Macmillan, 2025) Suprabha, K.R.; Sreepriya, J.; Prasad, K.
    Globally, businesses are increasingly gaining recognition for their non-financial performance due to heightened stakeholder demands about ethical and environmental responsibilities. This noteworthy shift in perspective has catalyzed the inception of this research, which seeks to scrutinize the influence of environmental, social, and governance disclosure (ESGD) on financial distress. To investigate the potential capacity of ESGD in mitigating financial distress, the researchers have employed the Generalized Method of Moments. Additionally, the study takes into account the moderating role played by the firm’s life cycle in this relationship. The findings underscore that the adoption of ESGD is associated with a decreased likelihood of default, thus highlighting its effectiveness as a risk management strategy. Moreover, this investigation emphasizes the impact of the firm’s life cycle on the link between ESGD and corporate financial distress. Rooted in signalling theory as the theoretical framework, the research posits that a wide spectrum of Environmental, Social, and Governance (ESG) initiatives not only enhances the consistency of signals but also amplifies the associated signal costs. Consequently, in alignment with this theoretical perspective and substantiated by empirical evidence, our study confirms a multifaceted influence of ESGD on financial distress, contingent upon the distinctive phases of a firm's life cycle. In consequence, this study offers valuable insights for managerial decision-making, guiding the development of tailored disclosure policies that align with the specific characteristics of a firm’s life cycle. © The Author(s), under exclusive licence to Springer Nature Limited 2024.