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3819 items in total found

Working Papers | 2021

Optimal Transport based Drift Detection for Sensor Streams: Method and Applications in Transportation

A. K. Laha and Shikha Verma

With increasing adoption of Internet of Things (IoT) across the transportation sector, there is a growing need for developing algorithms for analyzing data streams. Due to dynamic operating environment conditions in the transportation domain, the nature of the data streams frequently change and static predictive models are often not successful when dealing with, non-stationary data streams. Further, labelled data is often unavailable or is costly to acquire in real time. Thus, effective algorithms for such problems would aim to maximize accuracy while minimizing the labelled data requirements. In this paper, we propose a new algorithm namely, the Optimal Transport based Drift Detection (OTDD) algorithm, that aims to address the accuracy-labeling requirement trade-off. Experiments on artificial and real-life data sets from the transportation domain demonstrate that the OTDD algorithm performs better than some of the widely used competing algorithms in addressing the accuracy-labeling requirement trade-off.

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Working Papers | 2021

Tracing Director Liability Framework during Borderline Insolvency & Corporate Failure in India

M.P. Ram Mohan and Urmil Shah

The life of a company depends upon the fine balance between its management led by Board of Directors and shareholder, and non-shareholder constituencies acting as the risk bearers. The Board of Directors therefore are subjected to fiduciary duties towards both these constituencies at all financial phase of the company-solvency, insolvency and borderline insolvency. The director liability framework in India is currently split with obligations enshrined under the Companies Act, 2013 during solvency and Insolvency and Bankruptcy Code, 2016 during insolvency and borderline stage. The lack of judicial interpretation and scholarly discourse on the insolvent and borderline insolvent director liability framework has resulted in several practical challenges. To understand parallels, the paper comparatively analyzes the liability framework as existing under the corporate and insolvency laws of the United States and the United Kingdom with Indian insolvency law. The paper suggests that there is a need to align the Indian corporate and insolvency law through statutory measures to increase the remedial protections available to creditors during borderline insolvency. The paper also highlights mitigation measures which can be undertaken by the management to reduce the scope for director liability, until legislative or judicial clarity is provided on the framework.

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Working Papers | 2021

Treatment of Intellectual Property License in Insolvency: Analysing Indian law in comparison with the U.S. and U K

M.P. Ram Mohan and Aditya Gupta

A bankrupt debtor's ability to escape unprofitable contracts, enshrined in Section 365 of the American Bankruptcy Code, is considered central to a successful reorganisation within Chapter 11. The ambit of this power and the consequence of its application has been the subject of unceasing legal and business controversy. Intellectual property licenses assumed the forefront of this controversy in 1985 when the Court of Appeals for the Fourth Circuit held that Section 365 includes a unilateral power to rescind an Intellectual Property License. Congress reacted to the Court's decision by amending Section 365 and legislating specific protections for Intellectual Property Licensees. This paper explores the American jurisprudence on the treatment of intellectual property licenses during bankruptcy and examines them within the insolvency regimes of the United Kingdom and India. The study reveals an important legal deficiency: neither jurisdiction incorporates any explicit protections for Intellectual Property Licenses during bankruptcy. Further, we find no substantive provisions that deal with the treatment of ongoing contracts during Corporate Insolvency Resolution Proceedings in India and Administration in the UK. For India, this raises an important issue relating to the desirability of a resolution professional's ability to interfere with pre-petition IP licensing agreements. The authors underline the importance of such interference and suggest amendments to the Indian insolvency regime to deal with intellectual property licenses during bankruptcy.

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Working Papers | 2021

Pandemic Panic? Effects of Health System Capacity on Firm Confidence During COVID-19

Balagopal Gopalakrishnan, Jamus Jerome Lim, and Sanket Mohapatra

In this study, we examine the impact of health system capacity and government responses on firms' business confidence in response to the COVID-19 pandemic. Using a sample of firm-level data from 53 countries, we find that ex ante proactive measures - such as health spending by the public and private sectors and availability of medical staff - have a favorable impact on the firms' perceptions of risk and sentiment. This effect reduces as the number of COVID-19 cases rise, possibly as a result of the drain on a country's health resources. We also find that the ex post reactive measures - such as health and containment actions, and the overall quality of government response - also play a role in bolstering business confidence. These effects vary by firm size and the level of development of the economy, and are largely impervious to prior epidemic experience.

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Working Papers | 2021

Section 29A of India's Insolvency and Bankruptcy Code: An Instance of Hard Cases Making Bad Law?

M.P. Ram Mohan and Vishakha Raj

The Insolvency and Bankruptcy Code, 2016 offers a second chance to a distressed corporation but not its incumbent management. Section 29A of the IBC excludes promoters and the incumbent management of corporations with non-performing asset accounts from submitting resolution plans. Though contained in the IBC, judicial interpretation made section 29A apply to corporate reorganisations under India's Companies Act, 2013 as well. The introduction and application of section 29A is reflective of a broader scepticism toward allowing promoters and directors to regain control of companies that went into financial distress under their watch. This perception seems to be at odds with the overarching policy of the IBC which is to foster rehabilitation over liquidation and give corporations a second chance. This paper re-evaluates section 29A by examining whether it has solved the problems it had set out to and finds that some ineligibilities prescribed for the incumbent management under section 29A can be relaxed. It uses the example of the United Kingdom's insolvency regime (with which India bears similarities) to explain why resolution plans from the incumbent management should not be disallowed.

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Working Papers | 2021

Government responses, business continuity, and management sentiment: Impact on debt financing during COVID-19

Balagopal Gopalakrishnan, Joshy Jacob, and Sanket Mohapatra

We examine how the government responses, amenability to remote working, and managerial outlook associated with COVID-19 influence debt financing by firms around the world. We find that the propensity and the amount of loan financing by firms is higher with greater stringency of lockdowns. Firms' debt raising during the pandemic is also influenced by the work-from-home amenability of industries. We find that firms with greater reliance on customer interaction have a higher propensity for debt financing at the onset of the pandemic, indicative of their heightened need for liquidity. The propensity for bond financing is higher for firms that have a higher degree of exposure to the pandemic. In contrast, firms that hold a positive sentiment about the impact of the pandemic are less likely to raise debt financing. Our key results are largely robust to the effects of quantitative easing by the major central banks. The study deepens the understanding of the heterogeneous impact of the pandemic on debt financing on account of various country-, industry-, and firm-level factors.

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Working Papers | 2021

A minimum buyback requirement in open market repurchases: Impact on the signalling role

Pranjal Srivastava, Joshy Jacob, and Ajay Pandey

The paper investigates the impact of the imposition of a minimum buyback requirement on open market repurchases in India. We find that the regulatory change has led to a significant increase in the abnormal stock returns earned around buyback announcements. There is lower market timing through buyback execution,
accompanied by a change in the execution-style, implying a weaker instinct for opportunistic buybacks. Insiders increase their purchase of firms' stock as against increased selling before the regulatory reform, during the buyback execution period. These findings suggest that the regulation has strengthened the information
role of open market buybacks. Furthermore, implying a significant decline in the option value associated with open market buybacks after the regulatory change, we also document an increase in the propensity of firms with lower stock liquidity to buyback through fixed price tenders. Our findings suggest that the regulatory change has lowered the "cheap-talk" motives associated with the announcement of open market buybacks.

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Working Papers | 2021

The Role of Insolvency Tests: Implications for Indian Insolvency Law

M.P. Ram Mohan

Insolvency determination is central to the formal insolvency and bankruptcy proceedings of a debtor entity. In determining whether a company is solvent or insolvent, two tests are generally used by the bankruptcy courts across all jurisdictions: the Commercial Cash Flow and the Balance Sheet test. While enacting IBC, India has moved away from the traditional dual test approach followed by Indian courts under the Indian Companies Act to specific Cash Flow test. This paper discusses conceptual basis of the two tests as evolved under insolvency laws of the United Kingdom and United States, with a view to comparatively study the nascent Indian insolvency regime. We conclude that irrespective of the statutorily prescribed test, over the years, courts across jurisdictions have taken recourse to both the tests to ascertain the overall commercial viability. In this lies an answer for India's work in progress - Insolvency & Bankruptcy Code, 2016. While the cash flow test is the test specified under Indian insolvency law, the paper shows, both the tests exist for a reason and Indian regime may have to adopt international experience in applying both the tests more or less jointly within the spirit of efficient debt resolution.

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Working Papers | 2021

Central bank gold reserves and sovereign credit risk

Sawan Rathi, Sanket Mohapatra, and Arvind Sahay

Gold holdings with central banks are often considered to play a stabilizing role in times of crisis. This paper performs a cross-country panel data analysis of developed and developing countries to determine whether gold holdings of central banks contribute to sovereign creditworthiness. Our analysis confirms that an increase in central bank gold reserves reduces the credit default swap (CDS) spreads of a country. We also observe that during global crisis and country-specific crisis episodes, the role of central bank gold becomes even more important. In robustness tests, we account for potential endogeneity of central bank gold reserves using a Generalized Method of Moments (GMM) approach. The findings highlight the importance of gold in central bank reserves and indicate a positive role of gold in mitigating a nations external vulnerabilities in an uncertain global economic environment.

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Working Papers | 2021

A General Purpose Exact Solution Method for Mixed
Integer Concave Minimization Problems (revised as on 12/08/2021)

Ankur Sinha, Arka Das, Guneshwar Anand, and Sachin Jayaswal

In this article, we discuss an exact algorithm for mixed integer concave minimization problems. A piece wise inner-approximation of the concave function is achieved using an auxiliary linear program that leads to a bilevel program, which provides a lower bound to the original problem. The bilevel program is reduced to a single-level formulation with the help of Karush-Kuhn-Tucker(KKT) conditions. Incorporating the KKT conditions lead to complementary slackness conditions that are linearized using BigM. Multiple bilevel programs, When solved over iterations, guarantee convergence to the exact optimum of the original problem. Though the algorithm is general and can be applied to any optimization
problem with concave function(s), in this paper, we solve two common classes of operations and supply chain problems; namely, the concave knapsack problem, and the concave production transportation problem. The computational experiments indicate that our proposed approach out performs the customized methods that have been used in the literature to solve the two classes of problems by an order of magnitude in most of the test cases.

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