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Abstract This paper aims at analysing the state of the Digital Economy by observing growth patterns of some Developmental Variables (GDP and GDP Per capita) and some digitisation variables. We have analysed with the help of growth models,... more
Abstract This paper aims at analysing the state of the Digital Economy by observing growth patterns of some Developmental Variables (GDP and GDP Per capita) and some digitisation variables. We have analysed with the help of growth models, correlation and Granger Causality amongst Developing, Developed and the World Economy during a period of recent 15 years. There are five main findings. First, the existence of strong network economies between the broadband and the mobile technologies in developed world. Second, a general decline in fixed line services amongst all three-country grouping, which is not surprising. Third, economic growth variables and growth in mobile services are integrally linked. Fourth, there is bi-way causality between some growth variables and digitisation variables. Finally, there is evidence of a digital divide because digital economy at the global is dominated by developed economies, especially in E-commerce, which is a massive chunk of the global economy.
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The objective of the paper is to investigates the impact of global financial crisis on exports from India to the country of origin of Great Recession of 2007-2009 i.e., United States employing Gravity Model for the period 1985 to 2010.The... more
The objective of the paper is to investigates the impact of global financial crisis on exports from India to the country of origin of Great Recession of 2007-2009 i.e., United States employing Gravity Model for the period 1985 to 2010.The paper also analysis the trade relationship between the two countries during the crises period through the dummy variable approach. Data has been collected from Bloomberg, NIC, CEPII, FRED, St. Louis fed’s database and World Bank. The results obtained from OLS regression procedure reveals the influence of deteriorating economic and financial conditions in United States on the export demand from India during crisis period. Further, while the stage of economic development of both countries concomitant with population of US only was found to have an encouraging role towards India’s exports to US, the population of India was unearthed to have a regressive disposition in the equation. The distance between the two countries has been found to play a regres...
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The objective of the paper is to outline a brief evaluation of the impact of financial crisis of 2008 having origin in US on China. This paper discusses about the consequence of financial crisis that erupted in US but found its way to... more
The objective of the paper is to outline a brief evaluation of the impact of financial crisis of 2008 having origin in US on China. This paper discusses about the consequence of financial crisis that erupted in US but found its way to emerging economies riding on trade and financial channels of transmission. It also presents various policy rejoinders to contain the negative impact of crisis and stimulate domestic demand, reviving its economic growth. The paper concludes that the crisis reversed the record of sustained growth of three decades with depreciation in year 2008 and 2009. The slowdown in industrial production and construction sectors besides downward revision in export orders were attributed to be the core causes behind the slackening economy. The crisis abetted the decline in inflation which was high in pre-crisis period and decreased with the worsening of global and domestic economic scenario.
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The primary purpose of this research is to look into the Impact of cash payment on Operating and Financial synergies generated post the merger. The two‐stage least squares method Instrumental‐variables regression technique is employed to... more
The primary purpose of this research is to look into the Impact of cash payment on Operating and Financial synergies generated post the merger. The two‐stage least squares method Instrumental‐variables regression technique is employed to test the hypothesis of impact of cash payment on the synergies gained by the acquirer post the merger. The uniqueness of this paper is that it develops an effective technique for evaluating the phenomena of M&As using a composite synergy variable that accurately reflects the dynamic phenomenon. The paper uses “Principal Component Analysis” (PCA) estimation to generate dependent variable which is a conglomerate of several factors. For all models, the findings of the study reveal that payment in cash has a favorable and significant relationship with Operational and Financial Synergy, demonstrating the increased viability of acquiring entities in post‐M&A stage. Synergistic advantages of M&A appear to be perceived by enhanced Operating Income, improvem...
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The stability of the economy has explicitly become a key objective for fiscal, economic, and monetary policy. It is a broader term described by different aspects of finance and the financial system. One variable cannot be recognized for... more
The stability of the economy has explicitly become a key objective for fiscal, economic, and monetary policy. It is a broader term described by different aspects of finance and the financial system. One variable cannot be recognized for defining and achieving stability. The purpose of this paper is two-fold, one to construct four measures of financial stability (MFS). The second purpose is to use the four constructed measures of financial stability in two stage least square (TSLS) regression framework to know the impact of MFA on Foreign Direct Investment (inwards) of BRIC for a period from 2000-2017. In case of Brazil, all the four measures of financial stability are significant. In case of Russia, government finances are not appropriately managed. In case of China, the large inflow of FDI is because of government policies as rest of the measures are negative. In case of India, the government measures are not efficient to attract the FDI.The openness of the economy is positively co...
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Mergers and acquisitions are broadly undertaken to have extraneous advantages for the combined entity vis-à-vis standalone entities. The objective of the study is to evaluate the actual financial synergy realisations in case of four... more
Mergers and acquisitions are broadly undertaken to have extraneous advantages for the combined entity vis-à-vis standalone entities. The objective of the study is to evaluate the actual financial synergy realisations in case of four recent and significant MandA deals in three different sectors in India: automobile, banking, and pharmaceuticals. These are: Amtek Auto and JMT Auto; Kotak Mahindra and ING Vysya Bank; Sun Pharmaceuticals Industries Ltd and Ranbaxy Laboratories; and Express Scripts and Medco Health Solutions. Synergies are calculated for few basic parameters including revenue, expenditure, and PAT in all the four deals and also for industry-specific elementary performance indicators for proper evaluation of the industry. The results suggest Kotak Mahindra -ING Vysya Bank and Sun Pharma-Ranbaxy deals were able to realise most of the synergies that were estimated and were on the right track towards synergy realisation in the post-acquisition period. However, the Amtek Auto...
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Climate change is undeniably the major challenge of our times and poses a global threat to civilization. The present study attempts to analyze the shift in the environmental changes in the Indian chemical industry and to evaluate such an... more
Climate change is undeniably the major challenge of our times and poses a global threat to civilization. The present study attempts to analyze the shift in the environmental changes in the Indian chemical industry and to evaluate such an impact on the financial valuation and performance of the companies by investigating the case of one of the major players in the fluorochemical industry in India, Gujarat Fluorochemicals Ltd. (GFL). Employing Discounted Cash Flow Analysis, the study discovers that climate change in the form of increased carbon credits has positively impacted the financial valuation of GFL. The findings suggest that an increase of approximately 44% in the valuation of the GFL is owing to the revenue from the sale of the carbon credits as per the Kyoto Protocol.
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The objective of this paper is to assess inter-linkages between the equity markets of India, Indonesia, Thailand, Malaysia and Korea with US. The inter-linkages is assessed using co-integration approach. The analysis covers three periods... more
The objective of this paper is to assess inter-linkages between the equity markets of India, Indonesia, Thailand, Malaysia and Korea with US. The inter-linkages is assessed using co-integration approach. The analysis covers three periods i.e. pre-crisis period, during crisis and post-crisis period. The secondary objective is to analyse the direction of causality between US S& P 500 and the stock indices of India, Thailand, Malaysia, Indonesia and Korea respectively. The paper found that there are inter-linkages between the equity markets of India, Indonesia, Thailand, Malaysia and Korea with US. During the crises returns of S&P 500 are caused by returns of SENSEX, JKSE AND KOSPI.
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Performance of BSNL has been deteriorated over the years and if the trend remains then it has been projected that the company will have to suffer huge losses in the upcoming years. So, it is high time for them to take some strict measure... more
Performance of BSNL has been deteriorated over the years and if the trend remains then it has been projected that the company will have to suffer huge losses in the upcoming years. So, it is high time for them to take some strict measure to meet the intense competitive industry. The objective of the paper is to find out the reason for slowdown of BSNL a Public Sector Undertaking which at a time was earning an astounding profit to the tune of Rs.10,183 Cr during FY 2004-05 to a huge Loss of Rs.7,868 Cr during FY 2012-13 within a short span of 5 years. The study recommends the measures to be taken to prevent a Public Sector Giant from becoming sick.
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The paper analyses the relationship between Board Composition (proportion of non-executive directors) and Firm Performance of 145 non-financial NSE listed companies in India for a period of five years. The firm performance measures... more
The paper analyses the relationship between Board Composition (proportion of non-executive directors) and Firm Performance of 145 non-financial NSE listed companies in India for a period of five years. The firm performance measures include Tobin’s Q, Return on Assets, Return on Capital employed and Return on Equity. Econometric analysis is performed using Pooled OLS and Random Effect Model. The research findings reveal that Board composition has a negative and significant impact on firm performance. The results are robust for both econometric models and various performance measures used. The paper concluded that the negative impact of Board composition on firm performance is due to the fact that non-executive directors lack information about the operations of the firm which reduces their ability to function effectively hence reduces firm performance.
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The objective of the paper is to study the impact of Wholesale Price Index (WPI), Index of Industrial Production (IIP), Oil price, Gold price, Balance of Trade (BOT), Foreign investments in India (FII in Equity), Purchasing Manager Index... more
The objective of the paper is to study the impact of Wholesale Price Index (WPI), Index of Industrial Production (IIP), Oil price, Gold price, Balance of Trade (BOT), Foreign investments in India (FII in Equity), Purchasing Manager Index (PMI), Money Supply and USDINR currency prices on Call Money Market. Another objective is to build a predictive model using regression techniques based on these macroeconomic indicators. The analysis has been carried out based on the monthly time series data for the period April 2005 to December 2013. The results of granger causality shows that Money Supply causes movements in Call Money Market rate. Based on regression model it was determined that USDINR exchange rate, Balance of Trade, Brent Crude Oil Prices and Gold Price impacts monthly call rate. The paper concludes that more than 90% of the movements in call money rate can be explained by modelling the key economic factors through VAR.
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This paper seeks to examine the relationship between the CEO duality (one person serving the role of both chairman of the board and CEO) and firm performance. Existing literature on CEO duality is based on two theories of corporate... more
This paper seeks to examine the relationship between the CEO duality (one person serving the role of both chairman of the board and CEO) and firm performance. Existing literature on CEO duality is based on two theories of corporate governance. While agency theory suggests that CEO duality negatively affects performance, stewardship theory favors CEO duality and argues that it positively impacts the firm performance. The present paper adds to the existing literature by employing panel data of 145 non-financial companies listed on National Stock Exchange of India for a period of five years, i.e., 2008-2012. Firm performance has been measured using Tobin’s Q as a market-based measure, and Return on Equity (ROE) as accounting-based measure. Panel data is analyzed using fixed effect within and Least Square Dummy Variable (LSDV) model, random effect model and Feasible Generalized Least Square (FGLS) model. The paper concludes that when Tobin’s Q is used as performance measure, the presenc...
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A firm's financial attributes play an essential part in the merger decision. The present paper attempts to improve the existing literature on assessing M&A activity in Indian corporate. This research paper aims primarily to analyze... more
A firm's financial attributes play an essential part in the merger decision. The present paper attempts to improve the existing literature on assessing M&A activity in Indian corporate. This research paper aims primarily to analyze the (a) Synergies realized when the mode of payment in the merger deal is cash, (b) impact on bidder liquidity when payment is made in cash (c) Synergies realized when both target and acquirer in the deal belong to related industry, i.e. the merger is horizontal and (d) assess the impact on bidder leverage when payment is made in equity. The paper has analyzed a panel of 120 major Indian M&A deals from 2005 to 2015, having three years of data pre and post-merger. Instrument Variable Probit Regression analysis has been employed in the study. The key results from the analysis show that in case of payment method in the deal being cash, M&A appears financially favorable for the bidder companies. The results of the empirical analysis of the study do suppor...
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The paper seeks to examine the relationship between the corporate governance mechanisms (board size, board composition, board independence and CEO duality), ownership concentration (proxied by percentage of promoter's shareholding)... more
The paper seeks to examine the relationship between the corporate governance mechanisms (board size, board composition, board independence and CEO duality), ownership concentration (proxied by percentage of promoter's shareholding) and firm performance. The empirical analysis performed on the panel data of 178 non-financial National Stock Exchange-listed companies for 8 years, that is from 2008 to 2015. Firm performance has been measured using market-based measure Tobin's Q and accounting-based measure return on equity (ROE). Multiple regression analysis is performed using pooled ordinary least square regression and panel data regression models-fixed effect model and random effect model. The results of the study found that the impact of board size and board composition on the firm performance measures Tobin's Q and ROE is negative. Board independence is positively and significantly related to firm performance measures-Tobin's Q and ROE. The results revealed that ownership concentration has a positive and significant impact on firm performance. The positive influence of ownership concentration on firm performance implies that more substantial promoter stakes provide greater access to funds for initial investment and thereby lead to a larger scale of operation resulting in higher firm value. The study findings have significant implications for companies, researchers, academicians and policymakers engaged in corporate governance in emerging economies. The results of the study revealed that companies that comply with good corporate governance practices could expect to achieve higher financial performance and reduced agency costs. The results suggest that the policymakers should focus on increasing board independence, reducing board size to an extent and increasing the ownership concentration to the maximum level as stipulated by law to improve corporate governance standards.
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United States (US) and China are the two largest economies of the world, where the former is the biggest developed economy and the latter is one of the largest developing economies of the world. This paper implores to assess the cause and... more
United States (US) and China are the two largest economies of the world, where the former is the biggest developed economy and the latter is one of the largest developing economies of the world. This paper implores to assess the cause and effect of the US-Sino Trade War. The attempt is to understand the reasons behind the same and its impact on warring economies and collateral damage to the economies of other countries. The experience establishes that trade wars have no winners. The war started in year 2018; the long-run effects of this trade war are still to be seen yet; till date the impact of this crisis has been substantial for both the US and China.
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The objective of the article is to analyse the impact of US financial crisis of 2008–2009 on the GDP of India and GDP of BRICS nations for the non-crisis and crisis period. Fixed effects panel data, fixed effect model, random effect... more
The objective of the article is to analyse the impact of US financial crisis of 2008–2009 on the GDP of India and GDP of BRICS nations for the non-crisis and crisis period. Fixed effects panel data, fixed effect model, random effect model, Hausman test besides ADF unit root test were used to fulfil the abovementioned objective for the period 2000–2013. The findings displayed final consumption expenditure (FCE) to be the most influential variable in affecting the economic growth universally in both the models of India and BRICS. It was the export which was unearthed to have a more significant influence on economic growth of BRICS as a bloc followed by gross capital formation (GCF) than the other way round as in the case of India. Similarly, there was a variation in the influence of economic growth of USA when assessed separately on India in solitude and India as a part of BRICS economic bloc. This result thereby established the contagion flow of US financial crisis into the developin...
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This article seeks to examine the relationship between the board size and firm performance. Existing literature on board size is based on different theories of corporate governance. While agency theory and resource dependency theory... more
This article seeks to examine the relationship between the board size and firm performance. Existing literature on board size is based on different theories of corporate governance. While agency theory and resource dependency theory suggest that the board size positively affects performance, stewardship theory favours smaller board size and argues that larger board size negatively impacts the firm performance. The present article adds to the empirical literature by employing panel data analysis of 145 non-financial companies listed in the NSE CNX 200 Index of India corresponding to 16 industries. The study is carried out for a period of five years from 2008 to 2012. The firm performance has been measured using Tobin’s Q and the market-to-book value ratio (MBVR) as market-based measures and return on assets (ROA) and return on capital employed (ROCE) as accounting-based measures. The fixed effect model, random effect model and feasible generalised least square (FGLS) regression model...
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Corporate India witnessed the burgeoning economic growth since the 1990s that brought to the forefront the need for Indian companies to adopt corporate governance standards and practices, which are in line with international guidelines.... more
Corporate India witnessed the burgeoning economic growth since the 1990s that brought to the forefront the need for Indian companies to adopt corporate governance standards and practices, which are in line with international guidelines. This paper contributes to the existing literature by providing a review of the conceptual as well as empirical researches in the area of corporate governance and firm performance by highlighting the relationship between the corporate governance mechanisms (board size, board composition, frequency of board meetings, CEO duality) and firm performance. The research findings are contradictory and inconsistent. Some studies founded a strong positive association while some reported negative relationship between corporate governance mechanisms and firm performance while others did not found any significant relationship between the two.
Research Interests: Pca and Panel regression
The objective of the paper is to survey the theoretical basis for and empirical evidences on the impact of ownership structure on firm performance. The relationship between the various aspects of Ownership structure namely Ownership... more
The objective of the paper is to survey the theoretical basis for and empirical evidences on the impact of ownership structure on firm performance. The relationship between the various aspects of Ownership structure namely Ownership concentration, Managerial Ownership, Directors' Shareholding, Institutional Shareholding, Promoters Shareholding, Foreign Ownership and firm performance is reviewed. Ownership structure is considered as an important corporate governance mechanism to resolve the conflict arising between the managers and shareholders. Extensive theoretical and empirical work on this topic was done over the last two decades. However, there are inconsistencies in the results and the impact of ownership structure on firm performance was found positive, negative and insignificant. The probable reasons for the inconsistencies include corporate governance environment, endogeneity of ownership structure and measures of firm performance used. 1.0 INTRODUCTION The issue of Corporate Governance have received considerable attention after plethora of corporate scandals and scams of the major giants across the world. The failure of several leading companies in India and abroad emphasized the importance of corporate governance issues in last two decades. Corporate governance mechanisms include board parameters and ownership structure. Ownership structure is considered as an important corporate governance mechanism to resolve the conflict arising between the managers and shareholders. How ownership structure affects the firm performance is one of the major issue of concern for the policy makers, economists and that of a company as well. The fundamental insight into this issue was given by Berle and Means (1932) who believed the diffusion of ownership results in decrease in firm performance. They argued that the separation of ownership and control reduces management's incentives to maximise the corporate efficiency of modern corporations. Jensen and Meckling (1976) further developed their concern in the form of Agency Theory which provided the framework for ownership and firm performance studies worldwide. This theory is based on Principal-Agent relationship, according to which the agents (managers) perform their functions which are not in line with the interest of the shareholders (principals) and thereby reduces their wealth. On the other hand Klein et al. (2005) stated, " presence of dispersed ownership increases expectation of a positive relationship between measures of corporate governance and firm performance, other things being equal. " Corporate governance literature has evolved with a great deal of attention towards the ownership structure of the companies. Extensive theoretical and empirical work on this topic was done over the last two decades. However, the impact of ownership structure on firm performance was widely studied in developed countries. The impact is discussed very recently in emerging markets like India. Thus an attempt has been made here to bridge the gap by focusing on the studies on emerging economy as well. Ownership studies throughout the world have focussed on the different aspects of ownership structure and their impact on corporate performance. 2.0 OBJECTIVE The objective of the paper is to provide a comprehensive review of the findings of the studies based on the relationship between ownership structure and firm performance. Along with findings, the methodology used to derive impact of ownership structure and the various aspects of ownership structure viz. promoter shareholding, institutional shareholding, directors shareholding, foreign ownership etc. on firm performance is presented. The remainder of this paper is organized as follows: section 2 briefly provides the review of existing literature encompassing the methodological aspects and main findings. Section 3 presents the probable reasons for the inconsistency in the research findings. Section 4 gives the directions for future research and section 5 concludes. 3.0.LITERATURE SHOWING RELATIONSHIP BETWEEN OWNERSHIP STRUCTURE AND FIRM PERFORMANCE The onset of the separation of ownership and control in the modern organizations emphasized the need to study the effect of ownership parameter on the firm performance. Researchers have been trying to identify the optimal ownership structure and