Essays on corporate finance in Indian markets : a thesis presented in fulfilment of the requirements for the degree of Doctor of Philosophy in Finance at Massey University, Wellington, New Zealand. EMBARGOED until 10 November 2027.

Abstract

A strong and well-regulated financial system is essential for sustained economic growth. Financial sector reforms play a vital role in promoting efficient resource allocation, enhancing inclusion, mitigating business risks, and fostering long-term stability. India’s financial landscape has undergone a major transformation since the liberalization of the 1990s, transitioning from a highly regulated economy to a more open, market-oriented, and globally integrated system. Two landmark reforms—the Insolvency and Bankruptcy Code (IBC) introduced in 2016 and the Corporate Social Responsibility (CSR) law enacted in 2013—have significantly reshaped India’s financial and corporate framework. The IBC has improved the ease of doing business by providing a structured mechanism for insolvency resolution and creditor protection, while the CSR law has institutionalized responsible corporate behaviour by aligning business goals with social and environmental objectives. Despite these progressive measures, India’s financial system continues to face persistent external challenges such as rising crime, which creates uncertainty, increases transaction costs, and undermines investor confidence. This thesis examines the impact of legal reforms, corporate social responsibility, and crime on debt financing and investment efficiency in the Indian context. It provides robust empirical evidence that well-designed legal frameworks and governance mechanisms significantly enhance corporate performance, while external challenges like crime hinder firms’ investment efficiency. Collectively, the three essays in this study underscore the pivotal role of institutional frameworks in shaping corporate behaviour and economic outcomes—beginning with legal reform and extending to governance and enforcement. The findings reveal that proactive policy interventions such as the IBC and CSR reforms can enhance credit access and investment efficiency, contributing to sustainable and inclusive growth. However, the persistence of crime highlights the need for complementary governance and transparency measures to mitigate investment inefficiencies. Overall, this research contributes to understanding how institutional mechanisms and external constraints interact to influence firm behaviour and economic development in emerging markets. Importantly, these insights extend beyond India, offering valuable implications for policymakers and businesses in other developing economies seeking to strengthen institutions, promote economic resilience, and achieve sustainable progress.