ABSTRACT
We assess the impact of the Insolvency and Bankruptcy Code (IBC) enacted in India in 2016 on corporate behaviour. Using firm-level data for 2009–2018, we find that IBC lowered debt and borrowing costs. The impact was pronounced for firms with multiple banking relationships, although it was firms with single banking relationships that experienced significant cutbacks in investment.
Acknowledgments
Useful comments on an earlier draft by an anonymous referee are gratefully acknowledged. The views expressed and the approach pursued in this article are strictly personal.
Disclosure statement
No potential conflict of interest was reported by the author(s).
Notes
1 Firms in India have April 1–March 31 financial year.