Nitin Koshta, Hajam Abid Bashir and Taab Ahmad Samad
The main purpose of this study is to explore the presence of the EKC hypothesis in emerging economies. Additionally, the present study also explores the existence of the “resource…
Abstract
Purpose
The main purpose of this study is to explore the presence of the EKC hypothesis in emerging economies. Additionally, the present study also explores the existence of the “resource curse hypothesis” (RCH), and the causal relationship among the variables that are considered for testing the presence of EKC and RCH hypothesis for a panel of selected emerging economies for the time period between 1990 and 2014.
Design/methodology/approach
The authors performed unit root test followed by cointegration test to test the existence of cointegrating relationship among the variables. Dynamic ordinary least square (DOLS) and fully modified ordinary least square (FMOLS) methods are used to obtain long-run estimates of considered variables, and the Granger causality test is performed to test the directional causality.
Findings
The long-run estimates obtained from DOLS and FMOLS techniques support the presence of the EKC (inverted U-shape) and the RCH.
Originality/value
To the best of the authors’ knowledge, the present work is the pioneer study for EKC and RCH investigation in the context of emerging economies. The policy implication is that these economies should look forward to drafting new policies to reduce environmental degradation and promote sustainable development.
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Manish Bansal and Hajam Abid Bashir
This study aims to investigate the impact of business strategy on the classification shifting practices of Indian firms.
Abstract
Purpose
This study aims to investigate the impact of business strategy on the classification shifting practices of Indian firms.
Design/methodology/approach
The study considered cost leadership and differentiation strategy. Two forms of classification shifting, namely, expense misclassification and revenue misclassification have been examined in this study. Panel data regression models are used to analyze the data for this study.
Findings
The results show that managers of cost leadership strategy firms are more likely to be engaged in expense misclassification, whereas firms following differentiation strategy are likely to be engaged in revenue misclassification. Subsequent tests of this study suggest that firms following a hybrid strategy (mix of cost leadership and differentiation) prefer revenue misclassification over expense misclassification for reporting inflated operating performance. These results imply that firms prefer the shifting tool based on the ease and need of each shifting strategy. These results are consistent with several robustness measures.
Practical implications
The results suggest that investors should understand business strategy before developing insights about the accounting quality of firms. Investors should conduct a comprehensive review of income statement items before using items for portfolio evaluation.
Originality/value
To the best of the authors’ knowledge, this is the first study to examine the association between business strategy and classification shifting.
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Hajam Abid Bashir, Manish Bansal and Dilip Kumar
This study aims to examine the value relevance of earnings in terms of predicting the value variables such as cash flow, capital investment (CI), dividend and stock return under…
Abstract
Purpose
This study aims to examine the value relevance of earnings in terms of predicting the value variables such as cash flow, capital investment (CI), dividend and stock return under the Indian institutional settings.
Design/methodology/approach
The study used panel Granger causality tests to examine causality relationships among variables and panel data regression models to check the statistical associations between earnings and value variables.
Findings
Based on a data set of 7,280 Bombay Stock Exchange-listed firm-years spanning over ten years from March 2009 to March 2018, the results show higher sensitivity of earnings toward cash flows, CI, divided and stock return and vice-versa. Further, the findings deduced from the empirical results demonstrate that earnings are positively related to value variables. Overall, the results established that earnings are value-relevant and have predictive ability to forecast the value variables that facilitate investors in portfolio valuation. The results are consistent with the predictive view of the value relevance of earnings. Several robustness checks confirm these results.
Originality/value
This study brings new empirical evidence from a distinct capital market, India, and provides a new facet to the value relevance debate in terms of its prediction view. The study is among earlier attempts that jointly measure the ability of earnings in forecasting different value variables by taking a uniform sample of firms at the same period. Hence, the study provides a comprehensive view of the predictive ability of reported earnings.
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Manish Bansal, Taab Ahmad Samad and Hajam Abid Bashir
This study aims to provide a convincing argument behind the mixed findings on the association between sustainability reporting and firm performance by investigating the…
Abstract
Purpose
This study aims to provide a convincing argument behind the mixed findings on the association between sustainability reporting and firm performance by investigating the possibility of a non-linear relationship through a threshold model.
Design/methodology/approach
This study used (Hansen’s 1999) threshold framework to investigate the relationship between firm performance and sustainability reporting using a sample of 210 Bombay Stock Exchange-listed firms spanning over 10 years from March 2010 to March 2019. This framework helps to test the threshold effect’s presence, estimate the threshold value and check the authenticity of the estimated threshold value.
Findings
Sustainability reporting has a differential threshold impact on the different indicators of firm performance. On the one hand, the authors’ results illustrate that the firms’ operating performance is positively impacted if and only if the sustainability reporting crosses a certain threshold. On the other hand, sustainability reporting positively impacts firms’ market performance only up to a cut-off point.
Practical implications
Managers should strive to balance sustainability reporting to reap its desired benefits on firm performance.
Originality/value
This study explores the possible non-linearity in the association between firm performance and sustainability reporting and explains the relationship’s inconclusive results. Further, this study explores the field in the novel emerging economy with unique institutional settings that mandate spending on sustainability activities.
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Hajam Abid Bashir and Dilip Kumar
This paper aims to examine the impact of investor attention due to the COVID-19 pandemic, Twitter-based sentiment towards uncertainty and public sentiment on the performance of…
Abstract
Purpose
This paper aims to examine the impact of investor attention due to the COVID-19 pandemic, Twitter-based sentiment towards uncertainty and public sentiment on the performance of cryptocurrencies.
Design/methodology/approach
The authors employ the simple linear regression, quantile regression (QR), the exponential generalised autoregressive conditional heteroskedasticity (EGARCH) model, and sentiment analysis to examine this phenomenon. The authors utilise the daily closing price of the 20 leading cryptocurrencies, the Google search volume index of the “Coronavirus” keyword, the Twitter-based economic uncertainty index, and textual data collected from the Reddit social media platform.
Findings
The results show that investor attention and Twitter uncertainty have a negative (positive) effect on cryptocurrency returns (volatility). The QR results indicate a heterogeneous effect of investor attention and Twitter economic uncertainty on cryptocurrency returns with a higher effect in the lower quantiles. The findings indicate that cryptocurrencies fail to act as a safe haven during this pandemic.
Originality/value
The study is amongst the very few studies that capture the impact of investor attention/sentiment due to COVID-19 on the performance of cryptocurrencies.
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Asgar Ali and Hajam Abid Bashir
This study aims to provide a comprehensive overview of asset pricing research and identifies the general research trends in the area. The study also aims to provide future…
Abstract
Purpose
This study aims to provide a comprehensive overview of asset pricing research and identifies the general research trends in the area. The study also aims to provide future direction to the researchers in the area of asset pricing.
Design/methodology/approach
The study uses bibliometric analysis techniques to achieve the stated purpose. The study covers 3,007 articles published in the top 50 finance and economics journals, accessed from the Scopus database for a period of 47 years (1973–2020). After initial searching for “asset pricing” as the main keyword in “title, abstract, keywords”, the database yields 6,583 articles. This number further reduces to 3,007 articles when the search is restricted to research and review articles published in the top 50 peer-reviewed journals.
Findings
The tabular and pictorial representation obtained from the analysis exhibit that asset pricing is an extensively researched area; however, a sudden rise in the number of publications (242) observed for 2019 demonstrates a growing interest amongst researchers. Further, affiliation statistics indicate that the volume of research is mainly concentrated in the USA and other developed nations; hence it opens vistas for the exploration of risk-return dynamics in the context of emerging markets.
Originality/value
The work presents an exhaustive and comprehensive review along with potential research implications. The present study reconciles various contradictory views of the prior studies under asset pricing such as risk-return trade-off, low-risk anomaly and provides the researchers with potential research gaps.