Foundation Award for Research

I. Focus of research

My research focuses on risk faced by companies, and how firms and markets interact with each other when risks involved are known by all, as well as when one party in this interaction knows more than the other. My research shows that markets have a way of gleaning information from different sources, and the best way to interact with the market is through transparency and governance of risk. Using these tools, a firm can avoid miscalculations in its value by the market, and so also market penalties when risk exposures lead to adverse outcomes.

I strive to focus on risks that are fundamental to markets and organizations, which hold true internationally, irrespective of the sovereign legal environment in which a firm operates. Findings suggest the legal and regulatory environment need to meet a minimum threshold before efficient competitive market outcomes can be obtained.

The research is quantitative in nature. Sometimes I test extant competing theories using different experimental designs, while at other times I extend existing mathematical models to improve our understanding of how incorrect valuations of risk can be avoided using better quantitative models, or how models developed in one area can be modified and applied in another.

II. Title and year of major projects

• Prakash, P., Sangwan, V. and Singh, K., 2021. Transformational Approach to Analytical Value-at-Risk for near Normal Distributions. Journal of Risk and Financial Management, 14(2), p.51.
• Paruchuri, S., Han, J.H. and Prakash, P., 2021. Salient expectations? Incongruence across capability and integrity signals and investor reactions to organizational misconduct. Academy of Management Journal, 64(2), 562-586.
• Prakash, P and Rangan, N.K. (2020). Standards, Reputational Costs and Market Share: Empirical Evidence from the Credit Rating Industry (Invited article). Journal of Accounting and Finance, 20 (3), 37-63.
• Manu Gupta, Puneet Prakash and Nanda Rangan (2019). Cross-Country Variability in Cost of Raising Equity: Evidence from Seasoned Equity Offerings. International Review of Finance, 19(4), 821-850.
• Vinod Vasudevan, Puneet Prakash and Biswajit Saha (2018). Options Framework and Valuation of Highway Infrastructure under Real and Financial Uncertainties. Infrastruct. Syst., 24(3): 04018014.1-9.
• Manu Gupta, Puneet Prakash and Nanda Rangan (2017). Determinants of underwriting spreads internationally: Evidence from SEOs. Journal of Multinational Financial Management, 41, 1-22.

III. Future Directions of Research

My current and medium term interests are infrastructure issues, in line with the public affairs mission of the university. Infrastructure projects have long gestation periods. I have already undertaken some research in education and energy sectors in India with help from one of my doctoral students.

My paper ‘Linkages between investment potential and quality of educational institutions: Evidence from India’ is under review, while a co-authored paper

“Singh, K., Singh, A. and Prakash, P., 2022. Estimating the cost of equity for the regulated energy and infrastructure sectors in India. Utilities Policy, 74, p.101327.”

is already published.

IV. Topics related to your research and of interest to the broad University Community, for which you are available for presentations and/or consultations.

Valuation and quantification of risks. Risks to reputation of corporations/entities. Infrastructure financing and its costs.