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Article
Publication date: 19 June 2020

Ranjan Das Gupta and Rajesh Pathak

The study examines the role of a country's legal system in predicting the corporate cash holdings using a sample of 18 countries inherited with distinct legal traditions. The…

539

Abstract

Purpose

The study examines the role of a country's legal system in predicting the corporate cash holdings using a sample of 18 countries inherited with distinct legal traditions. The central point of the study is the comparative assessment of legal frameworks in shaping the corporate finance policies.

Design/methodology/approach

The authors employ host of regression techniques including dummy variables, panel data regression and Fama–MacBeth regressions to establish the relationship.

Findings

The study results support the idea of “theory of law and finance” that legal tradition is a key factor determining corporate behaviour and policy. In particular, the authors observe that firms operating in civil law systems hold significantly higher cash as compared to their peers from common law systems. Moreover, the authors report that the law system affects the corporate cash holdings through the channels of economic development and shareholder's protection, yet in opposite directions. This is because the authors find that in developed countries where civil law tradition prevails, firms hold reasonably higher cash. Moreover, if the firm belongs to high investors' protection country with civil law traditions, the cash holdings get substantially reduced. Besides, the authors find that the predictability of widely held determinants of cash holdings is not invariant of law traditions, and it holds true also when analysed in conjunction with the financial crisis. Overall, the authors find support for their postulation that corporate cash management policies are likely to be different across legal traditions. The study results are robust to the controls for various firm and country-specific antecedents of cash holdings and to the alternate econometric techniques.

Practical implications

The study findings would encourage the government and firm policymakers and regulators in strengthening the investor protection rights which would further augment the legal system and firm-specific corporate governance mechanisms. This would mitigate agency issues and managers would be forced to undertake investor-friendly financial policies especially corporate cash holdings which would be resulting into shareholder value maximization.

Originality/value

The study contributes uniquely since the existing literature is largely silent on the role that legal tradition of a country has on the cash holdings of its firms.

Details

International Journal of Emerging Markets, vol. 16 no. 8
Type: Research Article
ISSN: 1746-8809

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Article
Publication date: 28 May 2021

Rajesh Pathak, Ranjan Das Gupta and Abhinav Jalali

This study investigates if the widely held predictors of corporate leverage exhibit predictive consistency through times and across countries amidst country heterogeneities such…

316

Abstract

Purpose

This study investigates if the widely held predictors of corporate leverage exhibit predictive consistency through times and across countries amidst country heterogeneities such as legal principles, state of economic development and protection of investors’ rights.

Design/methodology/approach

We employ financial data for 3,197 unique firms from eight emerging and ten developed countries during the years 2001–2017 and use Tobit regression models, a two-step Fama−MacBeth(1973) regression and panel data regression techniques in order to ensure the robustness of estimates.

Findings

We find that firms in the civil French law system exhibit the highest average of a debt (around 27%), whereas firms based in high investors’ protection environment and in developed nations borrow significantly less than their counterparts. Furthermore, among predictors, including a firm's payout ratio, it returns on equity and the cash ratio except the P/B ratio have varying predictability for a corporate debt when firms are classified based on law systems, investors’ rights and the economic scenarios. The crisis period significantly affects the relationship of debt levels with legal systems, investors’ rights and economic development scenario. The author’s estimates are robust to alternate analysis.

Originality/value

This study is unique in its methodological approach and involves a considerably large number of countries and a longer study period for the results to be more generalizable compared to other existing studies.

Details

Managerial Finance, vol. 47 no. 11
Type: Research Article
ISSN: 0307-4358

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Article
Publication date: 29 April 2021

Rajesh Pathak and Ranjan Das Gupta

The authors examine the stability of dividend payout and the consistency in its predictability using sample of firms from 18 different countries amid their prevailing…

575

Abstract

Purpose

The authors examine the stability of dividend payout and the consistency in its predictability using sample of firms from 18 different countries amid their prevailing heterogeneous formal institutions (such as the legal system, corporate governance), the distinct state of economic development (developing vs developed) and changing times (during the crisis vs the noncrisis periods).

Design/methodology/approach

The authors use tobit regression models with distinct specifications for the authors’ investigations. The authors alternately analyze the study’s results using Fama–Macbeth (FM) (1973) and generalized least square (GLS) regressions.

Findings

The authors show a sharply declining stability in dividend payout with time using DeAngelo and Roll’s (2015) framework. In terms of predictive consistency, the authors report that only a few idiosyncratic factors predict dividends consistently, and these results hold qualitatively true across the robustness analysis. The firm's liquidity appears to be the most consistent predictor of dividends payout, whereas firm's size being on the other extreme. The results signify that the idiosyncratic factors that matter for firm's dividend policy are not country specific. Instead, it reveals commonality of predictors grounded on characteristics of countries such as legal environment, investor's protection, economic state (ES) and economic cycle.

Originality/value

The authors contribute to the dividends literature by providing the evidence of dividend instability through time and disapproving the stylized fact of sticky dividends. Besides, the authors provide international evidence of inconsistent predictability of dividends.

Details

International Journal of Managerial Finance, vol. 18 no. 2
Type: Research Article
ISSN: 1743-9132

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Article
Publication date: 22 May 2020

Rajesh Pathak, Ranjan Das Gupta, Cleiton Guollo Taufemback and Aviral Kumar Tiwari

This paper aims to examine the weak form of efficiency for price series of four precious metals, i.e. gold, silver, platinum and palladium, using a generalized spectral method.

196

Abstract

Purpose

This paper aims to examine the weak form of efficiency for price series of four precious metals, i.e. gold, silver, platinum and palladium, using a generalized spectral method.

Design/methodology/approach

The method has the advantage of detecting both linear and non-linear serial dependence in the conditional mean, and it is robust to various forms of conditional heteroscedasticity. The authors use three different rolling windows for the purpose of robustness.

Findings

The authors report weak form of efficiency across metals series for almost all rolling windows. The optimum efficiency for Gold and Palladium is achieved through 250 days rolling window estimates whereas it is 500 days rolling window for silver. Platinum has similar efficiency levels across rolling windows. The degree of efficiency for metal prices is observed to be varying over time with silver market possessing highest levels of efficiency. The efficiency synchronization also varies across rolling windows and metals.

Research limitations/implications

The results reveal that metal markets are efficient for most times implying the low predictability and the low likelihood of earning abnormal returns by speculating in these markets.

Originality/value

The study uses a relatively new statistical technique, the generalized spectral test, to capture linear and non-linear serial dependence. Therefore, the results possess adequate power against departure from market efficiency.

Details

Studies in Economics and Finance, vol. 37 no. 2
Type: Research Article
ISSN: 1086-7376

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Article
Publication date: 14 June 2019

Bishwanath Goldar, Isha Chawla and Smruti Ranjan Behera

The purpose of this paper is to assess the impact of India’s trade liberalization during the late 1990s and 2000s on productivity of manufacturing firms and verify whether the…

512

Abstract

Purpose

The purpose of this paper is to assess the impact of India’s trade liberalization during the late 1990s and 2000s on productivity of manufacturing firms and verify whether the productivity-enhancing impact of reductions in input tariffs was greater than that of output tariff cuts, as found in some earlier studies.

Design/methodology/approach

Firm-level (company-level) data drawn from Prowess database are used for the estimation of total factor productivity (TFP) at the firm level, done by using the Levinsohn–Petrin methodology. Econometric models are estimated to explain firm-level TFP. The explanatory variables used are output and input tariff rates and quantitative restrictions on imports at the industry level and firm characteristics such as firm size, export intensity and import intensity. Firm-level panel data for 2002-2010 or for a longer period 1998-2010 are used for the estimation of econometric models. Model estimation is done by applying the fixed-effects model and IV-2SLS, 3SLS estimators and EC2SLS estimators.

Findings

Trade liberalization had a significant positive effect on the productivity of Indian manufacturing firms. The lowering of output tariff had a greater beneficial impact on TFP of Indian manufacturing firms than the lowering of tariff on intermediate inputs.

Originality/value

Good deal of care has been taken in the measurement of output and inputs for the purpose of TFP measurement. Two alternative frameworks, gross output and value added, are used. This helps in making a better estimate of the impact of trade liberalization on TFP.

Details

Indian Growth and Development Review, vol. 13 no. 1
Type: Research Article
ISSN: 1753-8254

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Article
Publication date: 4 June 2021

Sheshadri Chatterjee, Ranjan Chaudhuri, Demetris Vrontis and Alkis Thrassou

Chalta hai (it is fine or it is acceptable) is an Indian cultural phenomenon that influences attitude towards work and business and diachronically adversely affects both. The…

326

Abstract

Purpose

Chalta hai (it is fine or it is acceptable) is an Indian cultural phenomenon that influences attitude towards work and business and diachronically adversely affects both. The purpose of this study is to explore its impact on the sustainability of business firms operating in India.

Design/methodology/approach

The research has firstly undertaken a theoretical study towards the development of appropriate hypotheses and a corresponding conceptual model, with emphasis on the effects of chalta hai culture as a moderator of the predictor-sustainability linkages. The model has been validated statistically through partial least square- structural equation modelling analysis of usable feedbacks from 349 respondents.

Findings

The research has concluded that the cultural notion of chalta hai impacts adversely the sustainability of business firms operating in India, with its effects being dominant.

Research limitations/implications

The research has scholarly and executive implications, as well as socio-cultural implications. The sample, however, allows for conclusions to be drawn reliably but with limited generalizability. Additionally, only three predictors have been considered, bestowing upon future research the task of building on the present model through additional pertinent predictors and boundary conditions that will enhance its explanative power.

Practical implications

The research has provided a scientifically developed model that guides Indian firm managers through appropriate steps that dissuade stakeholders from exhibiting the behavioural traits and attitudes of chalta hai culture, highlighting along the way its detrimental effects on Indian business sustainability.

Originality/value

There is little research on the business impacts of chalta hai and regarding the sustainability perspective/focus. In addition, this is in sharp contrast to the spread and impact of the phenomenon. This research and its findings, therefore, are valuable with regard to both their wider context (“chalta hai” business effects) and their specific focus (sustainability).

Details

Journal of Asia Business Studies, vol. 15 no. 4
Type: Research Article
ISSN: 1558-7894

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Book part
Publication date: 1 September 2023

Ishu Chadda

Abstract

Details

Social Sector Development and Inclusive Growth in India
Type: Book
ISBN: 978-1-83753-187-5

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Article
Publication date: 1 June 2021

Sajith Narayanan and Jyoti Ranjan Das

Purpose branding is a concept that has gained momentum in recent years. It is a marketing innovation that has the potential to change why and how companies work. Still, academic…

2902

Abstract

Purpose

Purpose branding is a concept that has gained momentum in recent years. It is a marketing innovation that has the potential to change why and how companies work. Still, academic research on purpose branding is scarce. This paper aims to increase awareness about purpose branding and showcase how it can be implemented successfully through account of Hindustan Unilever Limited (HUL).

Design/methodology/approach

The study is based on qualitative research and case analysis of HUL by examining its published reports, its parent company’s trade publications, press articles and relevant studies in indexed journals.

Findings

Purpose branding is a marketing innovation that delivers increased value to all stakeholders. The account of HUL reveals that purpose branding reaps economic rewards for the organization.

Practical implications

A study by Havas Media group involving 300,000 customers across 33 countries found that the customers would not care if 74% of brands in the world disappeared. In such a context, purpose branding provides a way to make the brand meaningful and play a worthy role in consumers’ lives. HUL’s brands that used this approach grew by 69% and accounted for 75% of its overall growth, showing how other organizations can imbibe it into their brands.

Originality/value

Despite many trade publications on this trending topic, there is limited academic research on purpose branding. This paper focuses on understanding this concept and demonstrates its successful use by an organization.

Details

International Journal of Innovation Science, vol. 14 no. 3/4
Type: Research Article
ISSN: 1757-2223

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Article
Publication date: 20 January 2021

Subal Ranjan Sahu and Jugal Mohapatra

The purpose of this study is to provide a robust numerical method for a two parameter singularly perturbed delay parabolic initial boundary value problem (IBVP).

205

Abstract

Purpose

The purpose of this study is to provide a robust numerical method for a two parameter singularly perturbed delay parabolic initial boundary value problem (IBVP).

Design/methodology/approach

To solve the problem, the authors have used a hybrid scheme combining the midpoint scheme, the upwind scheme and the second-order central difference scheme for the spatial derivatives. The backward Euler scheme on a uniform mesh is used to approximate the time derivative. Here, the authors have used Shishkin type meshes for spatial discretization.

Findings

It is observed that the proposed method converges uniformly with almost second-order spatial accuracy with respect to the discrete maximum norm.

Originality/value

This paper deals with the numerical study of a two parameter singularly perturbed delay parabolic IBVP. To solve the problem, the authors have used a hybrid scheme combining the midpoint scheme, the upwind scheme and the second-order central difference scheme for the spatial derivatives. The backward Euler scheme on a uniform mesh is used to approximate the time derivative. The convergence analysis is carried out. It is observed that the proposed method converges uniformly with almost second-order spatial accuracy with respect to the discrete maximum norm. Numerical experiments illustrate the efficiency of the proposed scheme.

Details

Engineering Computations, vol. 38 no. 6
Type: Research Article
ISSN: 0264-4401

Keywords

Available. Content available
Article
Publication date: 12 April 2013

Devashish Mitra and Priya Ranjan

2310

Abstract

Details

Indian Growth and Development Review, vol. 6 no. 1
Type: Research Article
ISSN: 1753-8254

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