Devendra Kodwani

The Regulation of the United Kingdom Electricity Industry: An Event Study of Price-Capping Measures

The privatization of United Kingdom utilities after 1979 established a regulatory regime based around price capping rather than return capping. This innovation was intended to provide a predictable framework that encouraged efficiency. An event methodology was used to examine stock market reaction to the main regulatory announcements affecting 12 Regional Electric Companies from flotation to 1995. The results indicate that the regulatory announcements were only a minor contributor to the persistent abnormal returns observed. The low connection between regulatory events, efficiency changes and abnormal returns at company level lead to a conclusion that the initial structural and control frameworks dominated the regulatory framework.

Shareholder wealth creation following M&A: evidence from European utility sectors

Mergers and Acquisitions (M&A) of European utility sectors subsequent to privatization and deregulation triggered widespread concern due to the crucial role played by utility sectors in a countrys economic and social development. From the study of a sample of 156 cases of M&A within utility sectors in Europe between 1990 and 2006, this study provides evidence on the performance of utility sectors following M&A. On one hand the findings suggest that lower levels of losses are accrued to the shareholders in the acquiring companies. On the other hand the fact that acquirer shareholders in the short run and the shareholders in the combined post-acquisition companies suffered losses in the long run triggers a negative signal for the investors in utilities.

Stock Market Investors’ Use of Stop Losses and the Disposition Effect

The disposition effect is an investment bias where investors hold stocks at a loss longer than stocks at a gain. This bias is associated with poorer investment performance and exhibited to a greater extent by investors with less experience and less sophistication. A method of managing susceptibility to the bias is through use of stop losses. Using the trading records of UK stock market individual investors from 2006 to 2009, this paper shows that stop losses used as part of investment decisions are an effective tool for inoculating against the disposition effect. We also show that investors who use stop losses have less experience and that, when not using stop losses, these investors are more reluctant to realise losses than other investors.

The impact of ICT‐enabled offshoring announcements on share prices

Purpose – The purpose of this paper is to determine the impact of announcements regarding information and communication technologies (ICTs)‐enabled offshoring on the share prices of public companies.Design/methodology/approach – The study is carried out by means of an event study.Findings – The finding from this research is that investors do not tend to reward offshoring announcements. It is most likely that the value of the firm will be perceived as unchanged or if there is a reaction, it is most likely to reduce the value of the firm. A positive relation between size of firm and the size of the offshoring contract is found. Also, US investors are found to be more likely to react negatively than UK investors.Research limitations/implications – This study extends the use of event studies in the information systems domain to ICT‐enabled offshoring. Owing to the relatively nascent state of offshoring, and consistent with previous event studies, the data set used in this study is relatively modest.Practical ...

International Evidence on the Determinants of Organizational Ethical Vulnerability: The Determinants of Organizational Ethical Vulnerability

This paper proposes a model to explain what makes organizations ethically vulnerable. Drawing upon legitimacy, institutional, agency and individual moral reasoning theories we consider three sets of explanatory factors and examine their association with organizational ethical vulnerability. The three sets comprise external institutional context, internal corporate governance mechanisms and organizational ethical infrastructure. We combine these three sets of factors and develop an analytical framework for classifying ethical issues and propose a new model of organizational ethical vulnerability. We test our model on a sample of 253 firms that were involved in ethical misconduct and compare them with a matched sample of the same number of firms from 28 different countries. The results suggest that weak regulatory environment and internal corporate governance, combined with profitability warnings or losses in the preceding year, increase organizational ethical vulnerability. We find counterintuitive evidence suggesting that firms’ involvement in bribery and corruption prevention training programmes is positively associated with the likelihood of ethical vulnerability. By synthesizing insights about individual and corporate behaviour from multiple theories, this study extends existing analytical literature on business ethics. Our findings have implications for firms’ external regulatory settings, corporate governance mechanisms and organizational ethical infrastructure.

Big data academic and learning analytics: connecting the dots for academic excellence in higher education

Purpose Although big data analytics have great benefits for higher education institutions, due to lack of sufficient evidence on how big data analytics investment can pay off, it is tough for HEIs practitioners to realize value from such adoption. The current study proposes a big data academic and learning analytics enabled business value model to explain big data analytics potential benefits and business value which can be obtained by developing such analytics capabilities in HEIs. Design/methodology/approach The study examined 47 case descriptions from 26 HEIs to investigate the causal association between the big data analytics current and potential benefits and business value creation path for big data academic and learning analytics success in higher education institutions. Findings The pressure of compliance with all legal & regulatory requirements and competition had pushed higher education institutions hard to adopt BDA tools. However, the study found out that application of risk & security and predictive analytics to higher education fields is still in its infancy. Using this theoretical model, our results provide new insights to higher education administrators on ways to create big data analytics capabilities for higher education institutions transformation and suggest an empirical foundation that can lead to more thorough analysis of big data analytics implementation. Originality/value A distinctive theoretical contribution of this study is its conceptualization of understanding business value from big data analytics in the typical setting of higher education. The study provides HEIs with an all-inclusive understanding of big data analytics and gives insights on how it helps to transform HEIs. The new perspectives associated with the big data academic and learning analytics enabled business value model will contribute to future research in this area.

An Analytical Study of Option Greeks on Derivative Markets in India

Derivatives markets in India are in a nascent stage at present. The National Stock Exchange of India (NSE) commenced trading in derivatives with index futures on 12 June 2000. The futures contracts on the NSE are based on S& P (Standard and Poor’s) CNX Nifty (National index of fifty shares); and options and futures on stocks were introduced in July and November 2001 respectively. Before derivatives were introduced in Indian financial markets, there was a localized solution to the need for short-term holdings of securities for the purpose of hedging or speculating. This system was known as badla transaction which essentially involved borrowing securities for a settlement period and squaring up short positions. That system was far from transparent and transaction costs (carry forward or backwardation charges) could sometimes be very high.

Role of Markets in Education

This essay focuses on higher education in India and argues that the role of state should be drastically reduced in provision, funding and monitoring if we are to ensure good quality facilities for higher education in India. It is argued that these activities should be left to market based institutions. Many questions may be raised in this context about increasing role of markets in higher education. Some important questions are addressed in this essay before recommending drastic reduction in the role of state in the education. Questions of accessibility financing the higher education from taxpayers’ are examined. The efficacy of state regulatory agencies to ensure quality is debated.