Purpose

The demand-side view of creditor rights posits a negative association between creditor rights and corporate borrowings. The purpose of this paper is as follows: first, the author examines whether the demand-side effect is more pronounced amongst firms with excess promoter shareholding. Subsequently, the authors analyze the impact of high promoter holdings on investment decisions owing to bankruptcy reforms.

Design/methodology/approach

To answer the above questions, the authors exploit the passage of the Insolvency and Bankruptcy Code (IBC) (2016) that strengthens the creditor rights of lenders, which impacts the borrowings and financing activities of Indian corporates. Using a panel of listed Indian firms over the period of 2012–2019, the authors analyze how the IBC affects firms’ borrowings and financing decisions with excess promoter holdings.

Findings

The authors find that bankruptcy reforms led to a statistically significant decline in the use of borrowed funds (primarily secured and long-term debt) by firms with high concentrated holdings. The analysis also indicates that firms with excess promoter ownership face an increased cost of debt due to bankruptcy reforms. As a result, firms with excess promoter holdings curtail their investments. Overall, the results indicate that India’s bankruptcy reforms significantly affect the firms’ financing and investment decisions with highly concentrated ownership.

Originality/value

While past research has explored the relationship between bankruptcy reforms and demand for/supply of debt, the authors provide novel empirical evidence on the role of promoter holdings that affects the relationship between bankruptcy law and financing and investment decisions. To the best of the author’s knowledge, this study is the first to investigate the role of ownership structure in the context of bankruptcy reforms by using a quasi-natural experiment.

中文翻译：

---

发起人所有权和破产改革：来自印度的证据

目的

债权的需求方观点认为债权与企业借款之间存在负相关关系。本文的目的如下：首先，作者检验了在发起人持股过多的公司中需求侧效应是否更明显。随后，作者分析了由于破产改革导致高发起人持股对投资决策的影响。

设计/方法/方法

为了回答上述问题，作者利用了《破产和破产法》（IBC）（2016）的通过，该法加强了贷方的债权人权利，这影响了印度公司的借贷和融资活动。作者使用 2012 年至 2019 年期间的一组印度上市公司，分析了 IBC 如何影响公司的借款和融资决策，并拥有过多的发起人持股。

发现

作者发现，破产改革导致高度集中持股的公司使用借入资金（主要是担保和长期债务）在统计上显着下降。分析还表明，由于破产改革，拥有过多发起人所有权的公司面临债务成本增加。结果，拥有过多发起人持股的公司减少了他们的投资。总体而言，结果表明，印度的破产改革显着影响了所有权高度集中的公司的融资和投资决策。

原创性/价值

虽然过去的研究探讨了破产改革与债务需求/供应之间的关系，但作者提供了关于发起人持股影响破产法与融资和投资决策之间关系的作用的新经验证据。据作者所知，本研究首次通过准自然实验研究了所有权结构在破产改革背景下的作用。