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Visiting Fellow from the Reserve Bank of India to develop ‘Survival Model’ to predict company bankruptcy

Dr Arvind Shrivastava from the Reserve Bank of India will spend the next six months at Bond University working closely with Professor Kuldeep Kumar of the Bond Business School on the development of a ‘Survival Model’ to predict financial distress and bankruptcy in the corporate world.

Dr Shrivastava was awarded a prestigious 2016 Endeavour Research Fellowship from the Australian Government Department of Education and Training, as part of its Australia Awards scholarship program, to conduct his research at Bond.

Dr Shrivastava, who is the Assistant General Manager with the Reserve Bank of India in Mumbai, will focus on bankruptcy prediction and fraud detection amongst Australian and Indian companies with his research project.

“There are a lot of companies in India, here in Australia and across the world facing bankruptcy, so the research will look at predicting when they will fail based on econometrics and statistical analysis,” Dr Shrivastava said.

“My major research outcome will be the development of a ‘survival model’ for banks and corporates to use to help them better assess and manage the risk and efficiency effectively by calculating the probability of a company entering into the liquidation stage.

“My focus will be on Indian and Australian companies, but this model will be able to be adopted and applied by banks globally in their assessment of company risk and formulation of credit and finance policies.

"A lot of Australian banks have foreign direct investments in Indian companies and vice versa, so this research will also assist them in making better risk decisions to protect their investments.”

Dr Shrivastava was conducting background research and looking at the work on bankruptcy prediction, when he discovered one particular paper that inspired him to do research and analytics in this space - that paper was written by Bond Business School’s Professor of Statistics, Kuldeep Kumar.

Having seen Professor Kumar’s ‘Expertise over Business failure’ bankruptcy prediction model, the Reserve Bank of India invited the Professor to deliver a talk in January of this year. The Bank’s internal researchers - with backgrounds in finance, economics and statistics - attended the seminar and have benefitted enormously. 

“I read many papers, which used many different techniques, but the one that impressed me greatly was Professor Kumar’s work that uses cutting-edge statistical analysis and machine learning techniques,” Dr Shrivastava said. 

“The opportunity to work closely with a world-renowned econometrician and statistician like Professor Kumar is a great honour and I am very much looking forward to working with his PhD economics and statistics students also.”

Professor Kumar said the fact Dr Shrivastava had chosen Bond as his base was testament to the high standard of quality, globally-relevant research being undertaken at the University as per the very much important and specific need of the corporate world.

“For many years our University has had strong ties with academics and business leaders in India, and a significant proportion of our international cohort here at Bond are Indian students,” he said.

“My students and colleagues in the Business School are very excited at the prospect of having Dr Shrivastava working amongst us over the next six months.

“Arvind has technical skills and expertise in areas we don’t have here at Bond, and this Fellowship presents an excellent opportunity for my PhD students to work with and learn from Arvind, and apply these learnings into their own research.”

Dr Shrivastava said he was enjoying his experience at Bond, and on the Gold Coast, immensely.

“Bond is a beautiful campus with excellent facilities and I have already met many academics and other business people from all over the world,” he said.

“The level of support I have been offered by the Business School and other areas of Bond is outstanding. Not only do I have access to financial data like CapitalIQ, Bloomberg and MorningStar, which is not accessible to me in India, but I also have access to very high quality library, computing and even sporting facilities.”

Dr Shrivastava is looking forward to the multi-faceted benefits the Fellowship at Bond will deliver.

“The Fellowship will allow me to gain invaluable international experience in statistical and economic research, and will also benefit me greatly in terms of my professional and personal development,” he said.

“I will listen, learn, gain experience and apply this back into my routine business and policy decisions at the Reserve Bank of India, plus my ultimate goal is to produce good quality research papers that will be published in top international journals.”

Dr Shrivastava holds a PhD in Statistics from the University of Allahabad in India, where he also lectured in statistics.  

Endeavour Scholarships and Fellowships are internationally competitive, merit-based scholarships funded by the Australian Government that support citizens around the world to undertake study, research and professional development in Australia and for Australians to do the same overseas.

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