Tarak Nath Sahu

An empirical study on the dynamic relationship between oil prices and Indian stock market

Purpose - – This study aims to investigate the dynamic relationships between oil price shocks and Indian stock market. Design/methodology/approach - – The study used daily data for the period starting from January 2001 to March 2013. In this study, Johansens cointegration test, vector error correction model (VECM), Granger causality test, impulse response functions (IRFs) and variance decompositions (VDCs) test have been applied to exhibit the long-run and short-run relationship between them. Findings - – The cointegration result indicates the existence of long-term relationship. Further, the error correction term of VECM shows a long-run causality moves from Indian stock market to oil price but not the vice versa. The results of the Granger causality test under the VECM framework confirm that no short-run causality between the variables exists. The VDCs analysis revealed that the Indian stock markets and crude oil prices are strongly exogenous. Finally, from the IRFs, analysis revealed that a positive shock in oil price has a small but persistence and growing positive impact on Indian stock markets in short run. Originality/value - – The study would enhance the understandings of the interaction between oil price volatilities and emerging stock market performances. Further, the study would enable foreign investors who are interested in Indian stock market helps in understanding the conditional relationship between the variables.

Role of microfinance institutions on the empowerment of female Borrowers: Evidence from West Bengal

Empowerment becomes a necessity not mere a choice for growth and development. Microfinance institutions are continuously struggle to offer their services for those who are financially excluded, economically backward and not empowered, especially women. It is a forwarding step for better tomorrow. Empowerment can be defined by various dimensions. This paper is an attempt to focus the role of MFIs towards economic empowerment in Purulia district of West Bengal. It deals with primary data surveying with structured questionnaire and collected data of 200 borrowers. Applying ordered logistic regression, it has been observed that MFIs do act as a supportive role for economic empowerment of female beneficiaries of the selected district.

Money Supply and Equity Price Movements During the Liberalized Period in India

This study attempts to contribute towards the prevalent understanding and the extant literatures on the effect of changes in money supply as an important monetary policy shock on the stock prices of India by using a time-varying parameter models with vector autoregressive specification during the period 1996 to 2016. The result of Johansen’s cointegration test suggests a significantly positive long-run co-movement between the growth of money supply and stock prices in India but the result of vector error correction model (VECM) does not exhibit any significant relationship in short run. Further, the error correction term of the VECM reveals a long-run unidirectional causality from money supply to stock prices. However, the Granger causality test confirms that the growth rate of money supply does not cause the stock market movement in India in short run. Finally, the variance decomposition analysis reveals that both the Indian stock markets are strongly exogenous in the sense that shocks to money supply explain only a small portion of the forecast variance error of the market indices. Again, the impulse response function analysis indicates that a positive shock in money supply has a small but persistently positive effect on stock prices in India.

Impact of ownership structure, board composition and CEO characteristics on corporate performance: An indian study

The purpose of this paper is to examine empirically the relationship between ownership structure, board composition, CEO Characteristics and firm performance in the context of selected Indian companies. The present study has been conducted taking 168 Indian companies listed in the BSE-200 Index of Bombay Stock Exchange (BSE) with their seven consecutive years’ data from 2010 to 2016. To finding out the empirical relationship, panel data regression model is used. Empirical findings assert that promoters’ shareholdings and institutional investors’ shareholdings have the significant and positive relationship with corporate performance. Again the number of directors has a positive significant relation with firm performance. A negative relation is documented in the case of independent and executive directors of the board with firm performance. Further, the multiplicity of directorship shows positive and statistically significant relation with ROCE and CEPS, whereas negative relation with Tobins Q and MVA which are not significant. With the help of empirical evidence, this study sought that promoters as the most significant stakeholder in Indian corporate sector empirically too who are highly protective of their investment and aim towards an increment in the value of their company. A larger size and less independent corporate board are also recommended to get better performance in the Indian context, though an optimum size cannot be recommended in this study.

Financial Leverage, Firm Performance and Value: with reference to Indian Manufacturing Firms

This empirical investigation is carried out aiming at contributing towards the existing conception on the effect of firms financial leverage on its performance and value. The study used a moderately balanced panel data consisting of 56 manufacturing firms listed and traded on Bombay Stock Exchange (BSE) of India during the period of 2011–16. Financial leverage is presented by Debt to Equity Ratio (DER) of the sampled firms whereas firm performance and value are measured by Return on Assets (ROA) and Tobins Q respectively. The study estimated Restricted F test, Lagrange Multiplier Test and Hausman Test for the purpose of final selection of appropriate model for the regression analysis and thereafter introduced Fixed Effect Model for the regression on such panel data Finally, the study found a significantly negative effect of financial leverage on performance and value of the sampled firms. The disciplinary role of debt as proposed by a number of eminent scholars (Jensen and Mecklings 1976, Grossman and Hart 1982) is not found to be working in this present study. The findings of this study is backed by the study of Stulz (1990) which showed how the fixed interest payment burden may force managers to forgo positive present value projects which further may adversely affect firm performance and value.

Impact of Ownership Structure and Board Composition on Corporate Performance in Indian Companies

Abstract This study takes into account the National Stock Exchange (NSE)-listed Indian companies, which constitute the CNX Nifty Index, for the period from 1 April 2009 to 31 March 2013. Tobin’s Q, market value added, cash earnings per share and return on capital employed have been used as the corporate performance variables in the study; the first two being market-based and the last two being accounting-based measures. Board size (BS), board composition, ownership structure, multiplicity of directorship, chief executive officer (CEO) duality, CEO tenure and executive remuneration have been used as corporate governance surrogates from different dimensions along with other widely used independent variables to see their effect on corporate performance in a panel-data-based regression. BS and foreign promoters’ (FPs’) shareholdings have been identified to have a positive impact on more than one corporate performance variable. Among the remaining independent variables, assets turnover is positively related with the performance variables.