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Article
Publication date: 1 April 1999

Thomas Downey

Abstract

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British Food Journal, vol. 101 no. 3
Type: Research Article
ISSN: 0007-070X

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Article
Publication date: 10 June 2014

Santu Das, Jamini Kanta Pattanayak and Pramod Pathak

The main purpose of this research study is to investigate the impact of quarterly earnings announcements on stock price movement of the firms constituting the SENSEX under…

Abstract

Purpose

The main purpose of this research study is to investigate the impact of quarterly earnings announcements on stock price movement of the firms constituting the SENSEX under two different market conditions – booming followed by recessionary. Analysis of price effect of quarterly earnings announcements during the five-year period prior to trading suspension, which is also characterized by a booming market condition have been made. Similar analysis during the five-year period following the trading suspension and marked by recessionary market condition has also been carried out side by side.

Design/methodology/approach

Event study methodology using daily returns and market model has been used for the purpose of analyzing the quarterly earnings announcement effects on the security prices of the firms. A sign test has also been used along with the event study.

Findings

The study reveals that quarterly earnings announcement does not have statistically significant effect on stock returns during the booming as well as the recessionary market conditions. The impact of quarterly earnings announcements on stock price movement of firms constituting the SENSEX has been similar for both periods undertaken in the study.

Research limitations/implications

The study has been undertaken using the firms listed in BSE SENSEX. The effect of the quarterly earnings announcement with reference to firms listed in other indices, if covered, may provide different sets of results.

Originality/value

The paper identifies the informational value of quarterly earnings announcement of BSE-SENSEX.

Details

Journal of Indian Business Research, vol. 6 no. 2
Type: Research Article
ISSN: 1755-4195

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Article
Publication date: 24 June 2019

Akasha Sandhu and Balwinder Singh

The purpose of this paper is to investigate the impact of board composition on the level of corporate internet reporting (CIR) practices.

Abstract

Purpose

The purpose of this paper is to investigate the impact of board composition on the level of corporate internet reporting (CIR) practices.

Design/methodology/approach

This study uses content analysis to examine the CIR practices of 140 Indian companies selected from the Bombay Stock Exchange 200 index for the year 2015. CIR was measured on a comprehensive internet disclosure index of 136 items capturing both content and presentation dimensions. Regression analysis was used to explore the impact of board composition (board size, board independence, frequency of board meetings, CEO duality and family members on the board) and audit committee characteristics on CIR while controlling the impact of variables firm size, leverage, profitability and industry type.

Findings

The findings reveal that larger boards, boards with less family members and audit committees that meet more frequently are more likely to engage in CIR practices. In addition, larger firms and firms that make less use of debt tend to disclose more information on their websites.

Research limitations/implications

The focus of the study has been on one aspect of corporate governance mechanisms i.e. board characteristics. Future studies can explore the impact of ownership structure on CIR practices.

Originality/value

This study extends the prior CIR research by demonstrating the effectiveness of corporate governance mechanisms in particular board characteristics in adopting internet reporting practices for Indian companies. The examination of the relationship between corporate reporting on the internet and corporate governance aids regulators in evaluating and enhancing the effectiveness of the boards.

Details

Journal of Financial Reporting and Accounting, vol. 17 no. 2
Type: Research Article
ISSN: 1985-2517

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Article
Publication date: 18 May 2012

Shveta Singh, P.K. Jain and Surendra S. Yadav

The purpose of this paper is to understand current practices in capital budgeting (including real options) in Indian companies and provide a normative framework…

Abstract

Purpose

The purpose of this paper is to understand current practices in capital budgeting (including real options) in Indian companies and provide a normative framework (guidelines) for practitioners (based on our findings and literature reviewed).

Design/methodology/approach

A questionnaire survey was administered to 166 non‐financial companies of the BSE 200 index. Secondary data were also collated from 2001‐2011.

Findings

Trends towards sophisticated techniques and sound capital budgeting decisions have continued in India. All sample respondent firms used discounted cash flow (DCF) techniques in conjunction with non‐DCF techniques. Internal rate of return (IRR), used by more than three quarters of the sample companies, is favored over net present value (NPV), used by half of the sample companies. Real options are used by half of the sample companies. Permanent (long‐term) capital has been used to finance fixed assets (net) and working capital (net).

Research limitations/implications

The limitations of the study are that it is country specific and a detailed sectoral analysis of the constituent sectors of the sample companies could have perhaps provided deeper insight into the subject.

Practical implications

The findings of this research, decades of teaching experience of the authors and the literature reviewed have been utilized to evaluate current practices and suggest possible improvements in decision making (through a normative framework).

Originality/value

The findings show that there still remains a theory‐practice gap in the usage of IRR over NPV. The usage of permanent (long‐term) capital to fund fixed assets (net) and permanent working capital requirements, although sound, could be an indication of surplus funds which could be used to repay long‐term debt or finance more asset building.

Details

Journal of Advances in Management Research, vol. 9 no. 1
Type: Research Article
ISSN: 0972-7981

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Article
Publication date: 24 August 2020

Luh Gede Sri Artini and Ni Luh Putu Sri Sandhi

The purpose of this study is to determine and compare the performance of small and medium enterprises (SME) and manufacturing company stock portfolios in the Indonesian…

Abstract

Purpose

The purpose of this study is to determine and compare the performance of small and medium enterprises (SME) and manufacturing company stock portfolios in the Indonesian, Chinese and Indian capital markets by the Sharpe Index and the significance of differences in average performance in the capital market.

Design/methodology/approach

This is comparative research that compared the performances of SME and manufacturing company stock portfolios in Indonesian, Chinese and Indian capital markets. The hypothesis examination of comparative test used one-way ANOVA technique on the performance of SME and manufacturing company stock portfolios in Indonesian, Chinese and Indian capital markets. One-way ANOVA test was used in the analysis to test the average difference of performance indices of SME and manufacturing company stock portfolios is in Indonesian, Chinese and Indian capital markets.

Findings

The performance of SME and manufacturing company stock portfolios in Indonesian capital market was not better than the performances of IHSG and LQ45 Index, the performance of SME and manufacturing company stock portfolios in Chinese capital market (SZSE) was better than the performance of Shenzhen Composite Index and the performance of Shenzhen A-Share Stock Price Index. The comparison of the performances of SME and manufacturing company stock portfolios in Indonesian, Chinese and Indian capital markets showed that the performance of SME and manufacturing company stock portfolios in Chinese capital market was the best and the performance of SME and manufacturing company stock portfolios in Indonesian capital market was the lowest.

Practical implications

The implication of this study was that SME and manufacturing company stock portfolios had relatively better performances in China and India, so investors should consider investing in SME and manufacturing company stocks. The performance of SME and manufacturing company stock portfolios in Indonesia was not able to exceed market and LQ45 portfolios, so the authority in Indonesia financial market should consider developing a special market for SME and manufacturing company to support the development of SME and manufacturing company in Indonesia and solve the problem of lack of funding source for SME and manufacturing company.

Originality/value

The originality of the present study is in the measurement of the performance of SME and manufacturing company stock portfolio by risk-adjusted return which returns per risk unit measured by Sharpe Index as a more beneficial measurement in measuring stock portfolio performance than average return. Comparative study of the stock portfolio performances of small medium enterprises and manufacturing company In Indonesian, Chinese and Indian stock markets, and object studies conducted in Indonesia, China and India.

Details

Journal of Economic and Administrative Sciences, vol. 37 no. 2
Type: Research Article
ISSN: 1026-4116

Keywords

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Article
Publication date: 8 May 2017

Aparna Bhatia and Siya Tuli

This paper aims to examine the relationship between sustainability reporting by companies and selected corporate specific attributes. It also highlights that the scope of…

Abstract

Purpose

This paper aims to examine the relationship between sustainability reporting by companies and selected corporate specific attributes. It also highlights that the scope of sustainability reporting differs from company to company and industry to industry.

Design/methodology/approach

Methodology is based on content analysis of 158 Indian companies selected from BSE 200. It uses multiple regression analysis to identify significant corporate attributes.

Findings

The analysis in this study reveals that companies with large size, older age, having multinational operations and belonging to Software, IT and ITES and Oil and Gas industry have significant sustainability disclosure. However, company’s profits, leverage, growth and advertising intensity are negatively related with the extent of sustainability disclosure. Other variables are found to be insignificant.

Research limitations/implications

As content analysis technique has been used for gathering sustainability information, subjective judgment involved in identifying and classifying the nature of reported sustainability information cannot be ruled out.

Practical/implications

This study adds to the growing literature on international sustainability disclosure practices and their determinants. Hence, it has its implications for a number of interested groups as investors, accounting bodies, regulatory authorities, companies, government, stock exchanges, general public, academicians and researchers.

Originality/value

As an emerging trend, there are few empirical studies exploring the determinants of sustainability reporting. To the best of the authors’ knowledge, this paper covers the impact of large number of corporate attributes in wholesome.

Details

International Journal of Law and Management, vol. 59 no. 3
Type: Research Article
ISSN: 1754-243X

Keywords

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Article
Publication date: 21 September 2015

Sanjay Sehgal and Kanu Jain

Momentum is an unresolved puzzle for the financial economists. The purpose of this paper is to dissect the sources of momentum profits and investigate the possible role…

Abstract

Purpose

Momentum is an unresolved puzzle for the financial economists. The purpose of this paper is to dissect the sources of momentum profits and investigate the possible role played by the macro-economic variables in explaining them.

Design/methodology/approach

The data for 493 companies that form part of Bombay Stock Exchange 500 index in India is used for calculating 6-6 momentum profits. Profits from the strategy are regressed on Capital Asset Pricing Model (CAPM) and Fama-French (FF) model to see whether they can explain these profits. Guided by prior research, three methodologies are used to see the possible role played by macro-economic variables in explaining momentum payoffs.

Findings

The empirical results show that momentum profits are persistent in the intermediate horizon. CAPM and FF three-factor model fail to explain these returns. Price momentum seems to be explained in one of the model by lagged macro-economic variables which lend an economic foundation to the Carhart factor. The “Winner minus Loser” factor explains about 37 percent of abnormal returns on the winner portfolio that are missed by the FF model. The unexplained momentum profits seem to be an outcome of investors’ over-reaction to past information. Hence, the sources of price momentum profits seem to be partially behavioral and partially rational.

Practical implications

The failure of risk models in fully explaining the momentum profits may be good news for portfolio managers who are looking out for stock market arbitrage opportunities.

Originality/value

This paper fulfills an identified need to study the sources behind price momentum profits in Indian context.

Details

International Journal of Emerging Markets, vol. 10 no. 4
Type: Research Article
ISSN: 1746-8809

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Article
Publication date: 16 November 2015

Naveen Kumar Srivastava

The financial crisis of 2008-2009 was truly global in nature that affected all sectors and countries of the world. Being considered that a board of directors is the main…

Abstract

Purpose

The financial crisis of 2008-2009 was truly global in nature that affected all sectors and countries of the world. Being considered that a board of directors is the main governance mechanism through which a company is governed and managed. The purpose of this paper is to examine the effect of the governance structure of a company on its financial performance during the period of financial crisis.

Design/methodology/approach

The study investigates the effect of board structure parameters – board leadership, directors and board size on the financial performance for 164 non-financial listed firms in India during the period of financial crisis of 2008-2009.

Findings

The study finds a significant positive effect with Chief Executive Officer duality, executive chairperson and proportion of inside directors on the firm’s financial performance. Independent directors have no significant influence, while non-executive (grey) director’s being affiliated with the firm has a negative influence on firm’s financial performance. A larger board has a negative relationship with the firm’s financial performance.

Research limitations/implications

The study is limited to large non-financial firms of the Bombay Stock Exchange-200 index. The study may be extended to include other firms to generalize the findings.

Practical implications

Results imply that during the period of financial distress, a company having more inside (or management) directors with an executive chairperson are in a better position to manage company resources with positive impact on financial performance. Companies with larger boards may find it difficult to take quick decisions, which ultimately affect their performance.

Originality/value

The study is original in its idea of assessing company strategy to adopt a suitable governance structure that can sustain its performance during the period of financial crisis.

Details

Journal of Strategy and Management, vol. 8 no. 4
Type: Research Article
ISSN: 1755-425X

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Article
Publication date: 15 February 2013

Naveen Kumar and J.P. Singh

The purpose of this paper is to examine the effect of corporate board size and promoter ownership on firm value for selected Indian companies.

Abstract

Purpose

The purpose of this paper is to examine the effect of corporate board size and promoter ownership on firm value for selected Indian companies.

Design/methodology/approach

The study analyses the corporate governance structure of 176 Indian firms listed on the Bombay Stock Exchange using linear regression analysis.

Findings

The empirical findings show a negative relationship of board size with firm value and significant positive association of promoter ownership with corporate performance. The study suggests that only above a critical ownership level of 40 percent does promoter's interest become aligned with that of the company, resulting in positive effect on firm value.

Research limitations/ implications

The research has been limited to some selected Indian companies, with focus only on board size and promoter ownership as predictor variables. The study suggests that corporate governance reforms in India and introduction of non‐executive independent directors to the board have resulted in diminishing effect of board size on the firm value.

Practical implications

The study implies that for emerging economies like India, it is practical to have greater ownership control by promoters to enhance company value. Also, it is not advisable to have a board size above certain limit.

Originality/value

The paper adds to existing literature on corporate governance by establishing a relationship between firm performance and board size and promoter ownership.

Details

Corporate Governance: The international journal of business in society, vol. 13 no. 1
Type: Research Article
ISSN: 1472-0701

Keywords

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Article
Publication date: 3 August 2015

Neha Seth and A. K. Sharma

The purpose of this paper is to examine the informational efficiency and integration simultaneously for select Asian and US stock markets while considering the impact of…

Abstract

Purpose

The purpose of this paper is to examine the informational efficiency and integration simultaneously for select Asian and US stock markets while considering the impact of recent financial crisis.

Design/methodology/approach

Daily stock market data from 13 world markets covering the period of ten years (from January 1, 2000 to December 31, 2010) is tested using Run test, Unit root test, GARCH(1, 1) model, Pearson correlation coefficient, Johansen’s cointegration test and Granger causality test.

Findings

It is concluded that the markets under study are inefficient in weak form which creates the chances of earning abnormal returns for the investors. Furthermore, the markets are found to be correlated and integrated in long-run, which makes the international fund diversification insignificant. The degree of inefficiency, in general, is not affected by the recent financial crisis but the level of integration among stock markets is reduced with the effect of recent financial crisis.

Practical implications

Individual/institutional investors, portfolio managers, corporate executives, policy makers and practitioners may draw meaningful conclusions from the findings of this type of researches while operating in stock markets. They can use such studies for the management of their existing portfolios as their portfolio management strategies may be, up to some extent, dependent upon such research work.

Originality/value

The originality of the present study lies in the fact that this paper is an attempt to fill the time gap of comprehensive researches on Asian and US markets and an effort to test stock market efficiency and integration simultaneously.

Details

Journal of Advances in Management Research, vol. 12 no. 2
Type: Research Article
ISSN: 0972-7981

Keywords

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