Santosh Sahu

CO2 Emission from Fossil Fuel Consumption and Technology Intensity

The contribution of this article lies in computing CO2 emission at the firm level for the Indian manufacturing sector from 2000 to 2011 and analysing the factors that explain the inter-firm variations in CO2 emission. The results indicate that there are differences in firm-level emission intensity and they, in turn, are systematically related to identifiable firm-specific characteristics. This study found size, age, energy intensity and technology intensity as the major determinants of CO2 emission of Indian manufacturing firms. In addition, capital and labour intensity of the firms are also related to the firms’ CO2 emission intensity. For a sustainable industrial development purpose, the short-run policy implications should be aimed at encouraging firms to invest more in research and development (R&D) and technology imports and in the long run, a firm should be able to adopt cleaner energy to reduce CO2 emission from the fuel consumption.

Labour and Energy Intensity: A Study of the Pulp and Paper Industries in India

This chapter is an attempt to understand the relationship between the labour and energy intensity for firms drawn from pulp and paper industries in Indian manufacturing. Pulp and paper industry accounts for a considerable share of the industrial enterprises, production, employment and exports in the Indian economy and also one of the energy-intensive industries in Indian manufacturing. This chapter uses data from the Centre for Monitoring Indian Economy (CMIE), at the unit level for the period 1992–2000. Analysis from the cross-tabulation of energy and labour intensity of the firms in this industry suggests that energy intensity is higher for the BSE-listed firms; however, the labour intensity is found higher for the non-listed firms. Further, energy and labour intensity is higher for the domestic when compared to foreign firms. The econometric analysis of the energy intensity and other firm-specific characteristics suggests that labour and energy intensity has an inverted U-shape relationship, suggesting a substitution possibility between energy and labour for the pulp and paper industries in India. The listed firms are found to be more energy intensive as compared to the non-listed firms. More importantly, technology import is found negatively related to energy intensity of firms, suggesting that firms in these industries could be using technology import and knowledge sharing from their foreign collaborators for energy saving.

Inter-firm differences in mergers and acquisitions: a study of the pharmaceutical sector in India

Purpose Mergers and acquisitions (M&A) are common strategies of firms to increase its performance. Although the motives of M&A are different, the determinants are discreet. The purpose of this paper is to determine the factors affecting M&A activities in the Indian pharmaceutical sector. Design/methodology/approach Using a balanced panel data of the pharmaceuticals sector in India, this study arrives at the determinants of M&A. The authors use regression techniques such as panel probit models, ordered probit models and matching techniques for a comparable and robust estimates for the factors related to M&A activities at firm level. Findings The empirical findings suggest that export intensity, import intensity, firm size and R&D intensity as the major determinants of M&A in the Indian pharmaceutical sector. In the context of acquisition, there is a riskiness associated with the any business strategy, for to which a firm may choose to finance the deal either via cash, stock or assets. This study further looks at the firm’s decision on the types of acquisitions and arrives at the determinants of such decisions. The factors such as capital intensity were found more important when acquisition by share was undertaken compared to others. The success of the M&A is observed by considering the financial performance of the firm measured in terms of the profit margin at firm level. Using the propensity score matching technique, this study concludes that M&A have a positive effect on the profit margin in the post-M&A scenario. Research limitations/implications The study seeks to add to the existing literature and empirical work done in the field of M&A, by not only looking at determinants that motivate a firm to merge and/or acquire but also if the decision of the firm is reflected positively in the firm’s performance. The study concludes that export intensity is an important factor for the pharmaceutical firms in India since exports are a major proportion of firm’s total sales. Technology transfers as technology imports and R&D conducted by the firm are both very important for the drug manufacturers. Any gap in the flow of drugs to the market would hamper the growth of the firm. The growth of the pharmaceutical industry depends on the close collaboration between small R&D units that lack resources to sell their work and large business houses, both domestic and foreign affiliated that will provide them the required market. However, all comprehensive work has been done in this study to cover all aspects of M&A including the financial pathway taken by the firm yet, the study has certain limitations as it does not take into account the entry and exit of firms from the industry. Practical implications Policies related to small and large firms should aim at making them export oriented and multinational affiliated to compete at the international market with corporate restructuring through M&A. This will help in firm’s growth and sharing of knowledge capital. Originality/value No such study is conducted that differentiate type of M&A and their determinants for the Indian pharma sector.

Foreign Direct Investment and Business Cycle Co-movement: Evidence from Asian Countries

Regardless of the stage of development of economy, foreign direct investment and trade are prominent channels of business cycle co-movements. In view of sustainability concerns, carbon emissions have been in focus for shaping international policy on trade and FDI. We analyze the linkages between FDI, trade and carbon emissions relative to the business cycle co-movements using a panel comprising of 25 pairs of Asian economies. Adopting econometric techniques such as the three-stage least squares and Bayesian inferences, the results indicate that both FDI and trade are important channels of international business cycle transmission. It emerges that correlation of manufacturing sector emission between countries is negatively related to business cycle co-movement and trade, but positively related to FDI. Therefore, FDI is horizontal and tends to complement trade. We conclude reduction in CO2 emissions from manufacturing sector acts as the stabilizing agent on the business cycle co-movement, while FDI induces pollution in these economies.

Firm performance and diversification: an empirical investigation of chemical sector in India

This paper attempts to understand the relationship between firm performance and diversification for the sample firms in the chemical sector in India. Using concentric index of diversification, this paper relates firm performance and diversification for the chemical sector. The results of this study indicate that, higher diversification leads to poorer performance as firms try to diversify into areas beyond their current scope. This paper further concludes that diversification is not a very good strategy to increase profits in the context of Indian chemical industries. Though diversification to some extent may give positive results but higher diversification leads to poor performance. The contribution of this work lies in identifying diversification for the chemical sector in India and compare with firm characteristics in general, and with the firm performance in particular.

Exports and Participation in CDM in Technology Intensive Industries in India

This study tries to find out the relationship between export and CDM participation for the technology intensive industries in India. Data are used from the PROWESS, CMIE and Verified Carbon Units (VCU) database from 2007 to 2012. Results of this study indicate that firm size, age of the firms, profitability and R&D intensity are the major determinants of export propensity. In addition, technology imports and multinational affiliation also help firms in exporting more. The CDM participation in terms of higher VCU, and energy related technological advancements at firm level are also found to be major determinants of export intensity. India, unlike other established European carbon markets is not a platform for trading, but the country is known for its creation of VCU and selling them. Government should focus more on smaller and less profitable firms and create a wider platform. Technology spillovers created by bigger and profitable firms which attract more benefits from Verified Carbon Offsetting should pool the entire interested, ready-to-participate firms and attain a common goal, i.e. economically viable, environmentally sustainable and the leaders in the international export market.

Impact of Agricultural Related Technology Adoption on Poverty: A Study of Select Households in Rural India

This paper applies a program evaluation technique to assess the causal effect of adoption of agricultural related technologies on consumption expenditure and poverty measured by different indices. The paper is based on a cross-sectional household level data collected during 2014 from a sample of 270 households in rural India. Sensitivity analysis is conducted to test the robustness of the propensity score based results using the “rbounds test” and the mean absolute standardized bias between adopters and non-adopters. The analysis reveals robust, positive and significant impacts of agricultural related technologies adoption on per capita consumption expenditure and on poverty reduction for the sample households in rural India.

Energy Consumption Response to Climate Change: Policy Options for India

In this article, the contributions of energy use to the climate variation debates are explored. Analyses based on secondary data depict that global fossil fuel use has increased and dominated world energy consumption and supply which is quite similar to the Indian case. This increase in the global energy use has resulted in higher emissions. To account for the changes in carbon dioxide (CO2) emission, this article follows an index decomposition analysis using data from PROWESS database of the Center for Monitoring Indian Economy (CMIE). Two factors are considered to account for the changes in emission intensity of Indian economy: (i) shift in output among three sectors of the India economy (Agriculture, Service and Manufacturing) and (ii) structural change due to change in aggregate output with respect to emissions change. Based on the estimates, we conclude that structural changes in the Indian economy from 1991 to 2007 played important major driving factor in reducing emissions compared to output shifts across sectors. Based on the findings and international experiences, few policy options for Indian economy, such as, energy pricing reforms, promoting investment in renewable energy technologies and creating public environmental awareness, are further suggested.

Performance of Watershed Development Projects under Different Management Regimes

Watershed development in India has gained momentum with a variety of agencies trying approaches to technology, costs and subsidies, and institutional arrangements. The Watershed Development Programme has three important features: Unprecedented devolution of decision-making power backed up by financial allocation directly to the district level and hence to the village organisation level, creation of partnerships between government and non-government organisations, and technical and financial flexibility. The project places special emphasis on improving the economic and social conditions of the poor and the disadvantaged sections of the watershed community. This has to be achieved through equitable distribution of benefits from land and water resources and through greater access to income-generating opportunities. With this background the present paper attempts to evaluate two different watershed development programmes in India under different management regimes. Considering both the project implementing agencies (PIA) and their performances this study summarizes that in few cases (total cultivated area, irrigated area and cropping intensity) the Government agency has resulted better than that of the voluntary organisations. as the PIA. But when we consider the participation of the beneficiaries, the voluntary organisations has yielded better result. The evaluation suggests that the WDA will bring sustainable development and will more successful when both the PIAs (Government & the Voluntary organisations) will work together at the village level.

Cost Benefit Analysis of Watershed Development Programme: A Study of Bichhiwada Watershed Project, Udaipur, Rajasthan, India

Following the Hanumanth Rao committee report Government of India initiated Watershed Development Programmes (WDPs) to improve and sustain productivity of the semiarid regions of the country at higher level. The aim of such initiatives are also to fulfill the needs of rural communities for food, fuel, fodder, and timber as majority of rural people are depending on the natural resource for their livelihood. WDPs are being given importance in the development plans for India and by donor agencies as they promote sustainable use of natural resources and improve the rural economy of India. This paper presents a social cost-benefit appraisal of a watershed development project in Rajasthan, India. The analysis has been done by the primary data collected from the Bichhiwada village and using Net Present Value (NPV), Benefit-Cost Ratio (BCR) and sensitivity analyses. The results show that if expected full benefits are realized, the benefits derived from the watershed project are quite high. The findings of this study suggest that watershed development projects initiated to improve the economy and ecology of Indias dry and semiarid regions are economically viable and socially desirable.