THE IMPACT OF PUBLIC EDUCATION EXPENDITURE ON ECONOMIC GROWTH AND INCOME DISTRIBUTION IN INDIA
Vijay P. Ojha1st October 2016
In this study, a multisectoral neo-classical type price driven computable general equilibrium (CGE) model, with the additional feature that it includes a mechanism by which public education expenditure to build human capital augments the supply of educated/skilled labor, is used to analyse the impact of an increase in the former, financed by an increase in direct tax rates, on economic growth and income distribution in the Indian economy. The simulation results suggest that it is possible to increase investment in education in the resource constrained fiscal environment of the Indian economy, and reap the benefits in terms of a faster economic growth and an improved income distribution. The results also suggest that secondary education needs to be accorded higher priority, though, not necessarily, at the cost of higher education. Finally, to maximize the benefits in terms of economic growth it is desirable that investment in physical capital be increased simultaneously with investment in human capital (education).
THE STABILITY OF INDIAN STOCK MARKET AFTER DEMONETISATION
Narain and Asha Rani1st October 2016
This study attempts to analyse the impact of demonetisation of High Denomination Currency Notes (HDCNs) on the stability of Indian Stock market. The current central government announced the withdrawal of HDCNs from Indian currency in circulation in a move to curb black money from the Indian economy by making Rs. 500 and Rs. 1000 currency notes not remaining legal tender from 9th November, 2016. This sudden move of central government has resulted into short-term contraction of money supply in the economy. The change in the money supply has resulted into redistribution of portfolios of Indian investors. The logistics of replacement of currencies has affected all walks of life. The earlier experiences of demonetisation in 1946 and 1978 has alternatively been negative and then positive for Indian stock market. Using Event Study methodology, this study examines the information content of announcement of demonetisation of HDCNs by the central government. The study also employs ARDL methodology to establish a stable long-run relationship between money supply and stock market. It was observed that the current move of reduction in money stock in the economy has both short-term and long-term implication for the investors’ wealth. Sooner the restoration of money supply happens, faster the investors regain their lost wealth.
HAVE BILATERAL INVESTMENT TREATIES INCREASED FDI INTO SOUTH ASIA?
Sarthak Agrawal, Tanya Sethi and Aasheerwad Dwivedi1st October 2016
This paper econometrically investigates the effect of Bilateral Investment Treaties (BITs) on Foreign Direct Investment (FDI) into five South Asian countries. It employs an extensive panel data model to conclude that the BITs signed by Bangladesh, India, Pakistan, Nepal and Sri Lanka between 1970 and 2014 have not led to an increase in FDI--a result that is later established on theoretical grounds as well. When this conclusion is juxtaposed with compelling literature on the BIT’s deleterious impact on domestic sovereignty and independent policy space, the scope for a pareto superior outcome is envisaged; and this outcome is shown to be a Nash equilibrium using an augmented prisoners’ dilemma model with a provision for mutual cooperation.
SURVIVAL OF THE FITTEST: AN EMPIRICAL ANALYSIS OF IPOs IN THE POST-SEBI ERA
Garima Baluja1st October 2016
The Indian primary market has seen several fluctuations in the post-SEBI era. The introduction of SEBI and abolition of CCI created ‘hot issue phenomenon’ in the market wherein several new issues entered the market, however, only a few managed to survive in the aftermarket. This paper explores the survival profile of 3125 IPOs issued during 1992-1996 using most sophisticated methodologies i.e., Logistic Regression and Survival Analysis. The models take a range of information concerning offering, market, and corporate specific characteristics of IPOs. The empirical investigation reveals that most of the IPOs entered the market in hot issue period (1992-1996) but they failed to survive longer in the market. Overall, the Kaplan-Meier estimation exhibits a significant decline in survival rate and a growth in hazard rate during the first 50-60 months of listing. The offering characteristics such as issue size, lead manager’s reputation, and IPO demand exhibit a positive influence, whereas initial returns, risk, and list delay exhibit a negative influence on the endurance of IPOs. The analysis of market specific variables and survival profile of IPOs reveals that issues in the period of high IPO activity fails to sustain longer on the exchange. The results of corporate specific variables validates that age of the company not only enhances the odds of survival of IPOs but also accelerates their survival duration in the aftermarket. The survival profile of IPOs varies across the several industries as well. The findings of this study will have fruitful implication for the issuers, investors, regulators, and the entire capital market as they can evaluate the future prospects of IPOs and can take rational decisions accordingly.
AN ASSESSMENT OF STRUCTURAL CHANGES IN THE DIRECTION OF INDIA'S IMPORT DURING POST-ECONOMIC REFORM PERIOD
Manoj Kumar Sinha1st October 2016
The main purpose of the paper is to analyze the structural changes in India’s direction of import during new trade policy since 1991 within the framework of WTO. The period of study is 1987:88 – 2014:15. The paper used the dominance pattern, ranking technique, mobility and turnover, concentration ratio and growth rate technique as research methodology for analysis of the paper. The paper found that USA has been at the top in exporting of goods and services to India.. Top five countries are exporting to India more than one-half of India’s import. Saudi Arabia and China are Asian Countries in top five countries. China and Russia within BRICS grouping are exporting around 10 percent to India. India’s import from SAARC countries is almost negligible. However, world level concentration ratio of India import direction is low. Growth rate of concentration ratio is low, negative and statistically significant. This is favourable for India because this may be possible because India deliberately simplifying her import procedures and adding new trading partners for import at competitive price. In general, USA is top exporting country to India. India needs to diversify her import direction on bilateral basis from SAARC and other Asian, African and South American counties. This will lead to increase India absorption capacity of global shock and recession such as global financial crisis in 2008 and reduce dependence on few developed countries.
DETERMINATIVE IMPACT OF EMPLOYER ATTRACTIVENESS DIMENSIONS OF EMPLOYER BRANDING ON EMPLOYEE SATISFACTION IN THE BANKING INDUSTRY IN INDIA
Jasveen Kaur and Ginni Syal1st October 2016
This research study focuses on identifying the different aspects of employer attractiveness dimensions that have significant impact on satisfaction of bank employees leading to strong employer (banks) brands from employees’ perspective in the banks in India. For accomplishing research objectives, questionnaire technique has been administered to 209 bank employees (managerial staff) from three regions Malwa, Majha and Doaba of Punjab state represented by Ludhiana, Jalandhar, and Amritsar cities respectively. The regression results have demonstrated that out of the four independent variables, three factors i.e. HRDV, OCDV, HRMV are significant determinants and one factor HRWV is having insignificant impact satisfaction of bank employees. It can, therefore, be concluded that effective employer brand is essential for satisfying its existing workforce. A strong internal as well as external branding by banks help them to influence the employees delivery of promised brand with the assumption of employees being happy with the organisation as effective employee relationship management (ERM) results in efficient customer relationship management (CRM). However, there is the need for employers to measure, analyse and position their employer brand to the job market where they will keep their existing workforce contended and exultant and can also attract the potential workforce, because more the employees are aligned towards their brand’s values, they are more likely to find their own meaning at work and enhance the brand’s value.
EFFICIENT MARKET HYPOTHESIS AND CALENDAR EFFECTS: EMPIRICAL EVIDENCES FROM THE INDIAN STOCK MARKETS
Harish Kumar and Rachna Jawa1st October 2016
The Efficient Market hypothesis is a cornerstone of modern investment theory that essentially advocates the futility of information in generation of abnormal returns in capital markets over a period of time. However, the existence of anomalies challenge the notion of efficiency in stock markets. Calendar effects, in particular, violate the weak form of efficiency, highlighting the role of past patterns and seasonality in estimating future prices. The present research aims to study the efficiency in Indian stock markets. Using daily and monthly returns of NIFTY 50 data from its inception in January 1995 to December 2015, we employ dummy variable multiple linear regression technique to assess the existence of calendar effects in India stock markets. To correct for volatility clustering and ARCH effect present in the daily returns, the results are modelled using the EGARCH estimation methodology. The study reveals the existence of calendar effects in India in form of a significant Wednesday Effect as well as a significant 'December effect', thereby suggesting that the Indian stock markets do not show informational efficiency even in the weak form, a trait observable in emerging markets.
ROLE OF CHILDREN IN RETAIL FOOD PURCHASES
Jyoti Vohra and Pavleen Soni1st October 2016
Women have been the primary grocery shoppers in retail stores. But due to emergence of nuclear families, children also accompany them while going out for shopping. Children either purchase foods themselves or assist mothers while purchasing foods. They also help mothers in family food shopping decisions. Thus, the main objective of this paper is to investigate the frequency of mothers visiting retail stores to buy foods, frequency of children accompanying mothers on shopping trips, children’s role in buying foods in retail stores, seeking opinion of children while buying foods and foods mostly requested by children in retail stores across gender and age groups. A structured and pre-tested questionnaire has been used for collecting data from 473 mothers of children in age category 4-11 years from Punjab (India). Data have been analysed using descriptive statistics through SPSS 19. The findings reveal that majority of mothers visit retail stores ‘according to need’. Sometimes, their children accompany them in retail stores and mothers ask for their opinion while buying foods. Children also request salty snacks, ready-to-cook foods, beverages and fruit juices, biscuits, ice-creams and sugared snacks. Retailers can benefit from the findings in order to retain existing women shoppers and to target potential consumers such as children.
GOVERNANCE STRUCTURE AND ACCOUNTING RETURNS: STUDY OF NIFTY500 CORPORATES
M.V. Shivani, P.K Jain and S.S. Yadav1st October 2016
The paper attempts to examine the relationship between various aspects of governance structure and return on assets as well as return on equity. For the purpose, the study makes use of some pertinent provisions such as size of board, board diversity in terms of gender, proportion of executive directors, proportion of independent directors, Chief risk officer (CRO), risk management committee, mandatory committees, voluntary committees and existence/nonexistence of whistle blower policy. The sample consists of Nifty500 corporates and covers a 10 year period from 2005-2015. Pooled OLS regression has been used to gauge the relationship. To ensure robustness of results year and industry effects, among other control variables, have been controlled for and results are similar across all models used. On a descriptive level, some noncompliance with certain mandatory provisions (e.g.: proportion of independent directors to be maintained) has been observed. Regression results indicate that larger boards and constitution of compulsory committees tend to be negatively related to return on assets (ROA) and return on equity (ROE). This calls for a review of provisions related to compulsory committees. Further, presence of non-executive directors, constitution of a risk management committee and formulation of a whistle blower policy has a significant positive impact on ROA and ROE. The results of the study are expected to be of immense utility to regulators, practitioners and academicians.
STUDY OF INTER-LINKAGES AND INTER-DEPENDENCE BETWEEN STOCK MARKET OF INDIA AND SRI-LANKA
Amit Kumar Singh and Rohit Kumar Shrivastav1st October 2016
Capital market of a country works as a channel for creating demand and supply of the debt and equity capital. It’s always been a very important part of overall financial system of every economy. On one hand primary market helps raising the funds for long-term requirements of the corporates and institution and on the other, secondary market provides buying and selling the securities already issued in primary market and hence provide liquidity to investors. This paper made an attempt to investigate the inter linkages and inter relationships between Sri Lanka and India’s stock market. This paper made an attempt for investigating the inter linkages and interrelationships between India and Sri Lanka’s stock market. Colombo stock exchange and National Stock Exchange are two fully automated exchanges of South Asia and leading stock exchange too. Since Sri Lanka and India are not only neighboring Asian Countries but they also enjoy good economic and political relationship from years therefore this paper tried to identify scope of integration between Sri-Lanka and India’s stock market due to establishment of the long-term relations between both the countries. We applied ADF test for stationarity of data series and found stationary at first difference. Descriptive statistics showed NSE market provide a little higher return in compare of Colombo stock market. Correlation between the indices of India and Sri Lanka is coming out to be +0.545507. Testing results of Granger Causality explained that return at Colombo exchange does not Granger Cause return at Indian stock exchange and vice versa. Johansen Co-integration test also speaks about no co-integration between them. Therefore, even though good relationship exists between these nations still stock market of both the nations are not integrated towards each other. Moreover, we did not find any causal relationship and inter linkages between both the nations stock market.