Mehul Raithatha

Bio: Mehul Raithatha is an academic researcher from Indian Institute of Management Indore. The author has contributed to research in topics: Corporate governance & Emerging markets. The author has an hindex of 6, co-authored 21 publications receiving 139 citations. Previous affiliations of Mehul Raithatha include Indian Institute of Management Ahmedabad & University of Mumbai.

Accounting Standards Compliance: Comparison between Manufacturing and Service Sector Companies from India

Abstract: The paper aims at identifying compliance level of Indian Manufacturing and Service sector companies with respect to Accounting Standards and possible company attributes affecting the level of compliance. The level of compliance has been determined by calculating Compliance Index consisting of Disclosures required by Accounting Standards in India. Company attributes like size, age, profitability, leverage, audit firm etc. are considered as explanatory factors. The average compliance has been higher for manufacturing companies (73%) as compared to Service companies (69%). Size, Foreign Listing, Audit firm has been found to be significantly associated with the level of compliance in case of Manufacturing companies whereas only size is significantly associated with level of companies in the case of service companies.

Risk disclosures and firm value: the role of governance in an emerging market

Abstract: PurposeThe objective of this paper is to investigate the impact of risk disclosures on firm value. We further investigate whether effective governance moderates the relation between risk disclosures and firm value.Design/methodology/approachWe use a sample of the top 200 Indian listed firms on NSE from 2013 to 2018. The generalised method of moments (GMM) along with the ordinary least square (OLS) is used to investigate our research problem. Further, we use the Propensity Score Matching (PSM) technique and the Heckman selection model for correcting selection bias in the robustness section.FindingsWe find that higher risk disclosures result in lower firm value. Besides, we show that better governance minimizes the negative impact of risk disclosures on firm value. This finding encourages firms to have a good governance mechanism to mitigate the adverse effects of risk disclosures in public.Originality/valueThe main contribution of our paper is to examine the moderating effect of governance between risk disclosures in the annual report and firm value (market-based and accounting-based) in the context of an emerging economy. Moreover, the paper highlights the potential moderating effect of independent directors and resourceful boards on the risk disclosures and firm value in the Indian context.

Internal corporate governance and cash flow manipulation

Abstract: PurposeThe authors examine whether internal corporate governance mechanisms are effective in curbing cash flow manipulation through real activities, misclassification, and timing.Design/methodology/approachThe sample comprises of firms from an emerging market, India with data for years 2004 through 2015. The authors use the methodology given in Roychowdhury (2006).FindingsThe authors find that corporate boards in India play an active role in curbing cash flow manipulation through real activities but fail to control cash flow manipulation through misclassification and timing.Practical implicationsThe study suggests that corporate boards should pay more attention to the reported cash flow numbers. Regulators can reduce the opportunities available for cash flow misclassification by fixing relevant accounting and governance norms. Auditors can also help by critically focusing on the cash flow classifications presented by management.Originality/valueThis study, to the authors’ knowledge, is the first study that talks about the role of internal governance in a trade-off between different cash flow manipulation techniques.

Indirect tax aggressiveness and tax reforms: Evidence from a quasi-natural experiment

Abstract: We study the incentives to engage in indirect tax aggressiveness and the implications of such actions for shareholder value. We take advantage of the recent indirect tax reforms in India to design our study as a two-stage analysis of the antecedents and consequences of tax aggressiveness. Our results suggest that the size of the product portfolio, geographical proximity of manufacturing facilities to the headquarters, and the extent of international operations are associated with the propensity to avoid indirect taxes. Further, ownership concentration, membership in business groups, and financial health of the company also affect indirect tax aggressiveness. Firms involved in tax aggressive behavior suffer shareholder value loss when their privileged position comes under risk due to tax reforms, as suggested by the stock price reaction surrounding the tax legislation. Firms endowed with sufficient liquid resources and better-connected firms appear to be able to mitigate the negative consequences suffered by their tax aggressive peers. JEL Classification: H25, H26; G14; K34; M41, M48.

Knowledge spillovers and new ventures' export orientation

Abstract: textWe draw on the knowledge spillover literature to suggest that a country's proportion of export-oriented new ventures represents an outcome of knowledge spillovers that stem from foreign direct investment (FDI) and international trade (export spillovers) as well as a source of knowledge spillovers (entrepreneurship spillovers). To test the hypotheses, we use macrolevel data from 34 countries during the period 2002-2005. We find that the relationship between FDI and international trade on the one hand and a country's proportion of export-oriented new ventures on the other differs for higher- and lower-income countries. In addition, a country's proportion of export-oriented new ventures affects the subsequent emergence of new businesses.

Firm performance, corporate governance and executive compensation in Pakistan

Abstract: This study examines the effects of firm performance and corporate governance on chief executive officer (CEO) compensation in an emerging market, Pakistan. Using a more robust Generalized Method of Moments (GMM) estimation approach for a sample of non-financial firms listed at Karachi Stock Exchange over the period 2005–2012, we find that both current- and previous-year accounting performances has positive influence on CEO compensation. However, stock market performance does not appear to have a positive impact on executive compensation. We further find that ownership concentration is positively related with CEO compensation, indicating some kind of collusion between management and largest shareholder to get personal benefits. Inconsistent with agency theory, CEO duality appears to have a negative influence, while board size and board independence have no convincing relationship with CEO compensation, indicating board ineffectiveness in reducing CEO entrenchment. The results of dynamic GMM model s...

Acquiring new technologies and capabilities: A grounded model of acquisition implementation

Abstract: In this study, we explore seven in-depth cases of high-technology acquisitions and develop an empirically grounded model of technology and capability transfer during acquisition implementation. We assess how the nature of the acquired firms' knowledge-based resources, as well as multiple dimensions of acquisition implementation, have both independent and interactive effects on the successful appropriation of technologies and capabilities by the acquirer. Our inquiry contributes to the growing body of research examining the transfer of knowledge both between and within organizations. Propositions are developed to help guide further inquiry into the dynamics of acquisition implementation processes in general and, more specifically, the process of acquiring new technologies and capabilities from other firms.