Date of Award
Fall 12-2018
Degree Type
Dissertation-Restricted
Degree Name
Ph.D.
Degree Program
Financial Economics
Department
Economics and Finance
Major Professor
Mukherjee, Tarun; Krishnaswami, Sudha
Second Advisor
Lane, Walter
Third Advisor
Zirek, Duygu
Abstract
The higher the level of information asymmetry between a firm and its investors, the higher is the firm’s reluctance to raise money externally, potentially leading to investment distortions. An improved disclosure system reduces information asymmetry and therefore, lessens the adverse selection effects of external financing, thereby moderating investment inefficiencies. In this paper, we examine the impact of potentially improved transparency stemming from stricter disclosure requirements (Clause 49) on financing and investment decisions of Indian firms. The results show that reliance of Indian firms on internal financing in the pre-reform period gives way to greater use of external financing in the post-reform period, and alleviation in financial constraints. While expanded funding sources do not seem to improve investment unambiguously, firms that suffered under-investment prior to the reform show a significant improvement in investment post-reform. Firms also increase their financial slack making it possible for them to engage in acquisitions within India as well as abroad.
Recommended Citation
Raj, Sakshi, "The Effectiveness of Government Mandated Disclosure Reform" (2018). University of New Orleans Theses and Dissertations. 2561.
https://scholarworks.uno.edu/td/2561
Rights
The University of New Orleans and its agents retain the non-exclusive license to archive and make accessible this dissertation or thesis in whole or in part in all forms of media, now or hereafter known. The author retains all other ownership rights to the copyright of the thesis or dissertation.