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Article
Publication date: 14 June 2024

Shailesh Rastogi and Jagjeevan Kanoujiya

The study aims to explore the impact of ownership concentration (OC) on bank financial distress (FD). Furthermore, the bank’s financial stability levels determine the association…

Abstract

Purpose

The study aims to explore the impact of ownership concentration (OC) on bank financial distress (FD). Furthermore, the bank’s financial stability levels determine the association between the two.

Design/methodology/approach

Bank data of 33 Indian commercial banks are procured for ten years (2013–2022). The panel data econometrics is applied for empirical estimations. The quantile regression approach is used to determine the association between OC and FD at different quantiles of the FD. Non-normalcy of the data is checked and ensured before applying the quantile regression.

Findings

Surprisingly, it is found that promoters have a nonlinear impact on the firm’s stability. The inverted U-shape result implies that as promoters cross a threshold level, the benefit of increasing promoters’ stake takes a beating and a further increase in promoters’ stakes adversely impacts the stability of the banks. Moreover, this threshold value increases while moving from low to high levels of stability in a quantile regression application.

Research limitations/implications

This study uses promoters as the proxy for OC. Other existing definitions of OC are not used in the study, which can further improve the robustness of the results. Additionally, the use of the type of ownership (private, public or foreign) is also not adopted in the present study. Both the limitations can be the study’s future scope on the topic.

Practical implications

The high OC is supposed to influence corporate governance adversely. Therefore, policymakers recommend low OC for better governance. However, the present study finds evidence that a higher OC (high threshold of OC as the stability increases) would be better for financial stability. This situation demands a trade-off between governance and financial stability regarding OC.

Originality/value

The authors do not observe any study having the nonlinear impact of OC on financial stability (opposite of FD). Moreover, the threshold of OC for the optimum level of financial stability increases as stability goes high. This evidence using quantile regression and finding the turning point using a quadratic equation is also not seen in the literature.

Details

Corporate Governance: The International Journal of Business in Society, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1472-0701

Keywords

Article
Publication date: 14 April 2023

Shailesh Rastogi and Jagjeevan Kanoujiya

This study aims to determine the mutual association between the volatility of macroeconomic indicators (MIs) and India’s tourism demand.

Abstract

Purpose

This study aims to determine the mutual association between the volatility of macroeconomic indicators (MIs) and India’s tourism demand.

Design/methodology/approach

Bivariate generalized autoregressive conditional heteroscedasticity (GARCH) models are applied to estimate the volatility spillover effect (VSE) from one market to another. Compared to the other methods, bivariate GARCH has wide acceptance for estimating the VSE. The monthly MIs and tourism demand data (2012–2021) are gathered for empirical analysis.

Findings

The evidence of the growth-led tourism (GLT) demand is seen. In the short term, tourism-led growth (TLG) is indicated. However, this TLG does not sustain itself in the long run. There is significant evidence in favour of the VSE from the MIs to the tourism demand ensuring GLT in India.

Practical implications

The main implication of the current study is to ignore the short-term influence of tourism demand on the economy because it does not sustain itself in the long run. However, the long-term influence of macroeconomic indicators on tourism demand should be seen with caution. Hedging, if possible, may be considered to protect the tourism sector’s interests from adverse economic fallouts.

Originality/value

There is a lack of studies on the volatility (especially on the VSE) between MIs and tourism demand. Hence, this study fills the research gap and presents a novel and unique contribution to the extent of the knowledge body on the topic and significantly contributes.

设计/方法论/方法

双变量GARCH模型用于估计从一个市场到另一个市场的波动溢出效应(VSE)。与其他方法相比, 双变量GARCH在估计波动溢出效应时得到了广泛的接受。收集2012-2021年的月度管理信息系统和旅游需求数据进行实证分析。

目的

该研究旨在确定宏观经济指标(MIs)的波动与印度旅游需求之间的相互关系。

研究发现

GLT(增长主导的旅游需求)的证据显而易见。从短期来看, 旅游导向型增长(TLG)可行。然而, 这种旅游导向型增长并不能长期维持下去。有重要的证据支持印度管理信息系统到旅游导向型增长的旅游需求波动溢出效应。

实际意义

当前研究的主要启示是忽略了旅游需求对经济的短期影响, 因为从长远来看, 它无法自我维持。然而, 宏观经济指标对旅游需求的长期影响应谨慎看待。如有可能, 可考虑对冲, 以保护旅游业的利益不受不利的经济影响。

创意/价值

目前对管理信息需求与旅游需求之间的波动(尤其是波动溢出效应)的研究较少。因此, 本研究填补了这个研究空白, 并对该主题知识体系的内容呈现新颖而独特的促进作用, 有显著的贡献作用。

Diseño/metodología/enfoque

Los modelos GARCH bivariantes se aplican para estimar el efecto indirecto de la volatilidad (VSE) de un mercado a otro. En comparación con otros métodos, el GARCH bivariante goza de gran aceptación para estimar el VSE. Para el análisis empírico se recopilan los MI mensuales y los datos de demanda turística (2012–2021).

Objetivo

El estudio se centra en medir la relación mutua entre la volatilidad de los indicadores macroeconómicos (MI) y la demanda turística de la India.

Conclusiones

Se observan indicios de GLT (demanda turística impulsada por el crecimiento). A corto plazo, se evidencia el TLG (crecimiento impulsado por el turismo). Sin embargo, este TLG no se mantiene a largo plazo. Existen pruebas significativas a favor del VSE de los MI a la demanda turística que garantizan el GLT en India.

Implicaciones prácticas

La principal implicación del presente estudio es desestimar la influencia a corto plazo de la demanda turística en la economía porque no se sostiene a largo plazo. Sin embargo, la influencia a largo plazo de los indicadores macroeconómicos en la demanda turística debe considerarse con cautela. Por ello, la cobertura de riesgos puede plantearse para proteger los intereses del sector turístico de las repercusiones económicas adversas.

Originalidad/valor

Existe una carencia de estudios sobre la volatilidad (especialmente en el VSE) entre los MI y la demanda turística. En consecuencia, este estudio realiza una aportación investigadora mediante una contribución novedosa y única en la ampliación del conocimiento sobre el tema de análisis.

Article
Publication date: 5 May 2023

Shailesh Rastogi, Kuldeep Singh and Jagjeevan Kanoujiya

Nowadays, informed decision-making is catching up. Technological advancements and computing ability further fuel and facilitate this tilt toward informed decision-making. In such…

Abstract

Purpose

Nowadays, informed decision-making is catching up. Technological advancements and computing ability further fuel and facilitate this tilt toward informed decision-making. In such a scenario, data is cynosure. Therefore, the ability to gather data by a nation (incredibly accurate public data) becomes equally important and relevant, as measured by statistical performance indicators (SPI). This study aims to explore the association of financial inclusion (FI); environmental, social and governance (ESG); poverty; and SPI.

Design/methodology/approach

The panel data of 140 nations for nine years are gathered to explore the association of FI, ESG and poverty with the SPI. Panel data estimation is conducted to arrive at the results.

Findings

The findings of this study highlight mixed outcomes for FI. ESG is positively associated with SPI, but poverty is not associated with SPI. These findings imply that an increase in FI may reduce the statistical capacity of the nations. An increase in ESG increases the capacity. However, change in poverty does not influence the SPI. The recommendation based on this study’s outcome suggests auditing the FI and poverty vis-à-vis SPI to ensure SPI’s veracity and robustness in the long run.

Originality/value

The way in which the individual social, economic and environmental indicators influence the SPI needs to be tested to establish the veracity and robustness of the SPI, which is barely researched as observed in the literature.

Details

Social Responsibility Journal, vol. 19 no. 10
Type: Research Article
ISSN: 1747-1117

Keywords

Article
Publication date: 28 June 2022

Venkata Mrudula Bhimavarapu, Shailesh Rastogi and Jagjeevan Kanoujiya

The disclosures in banks have become a matter of grave concern, especially post 2008 world financial crisis. The issue further gets exacerbated because disclosers in banks are…

Abstract

Purpose

The disclosures in banks have become a matter of grave concern, especially post 2008 world financial crisis. The issue further gets exacerbated because disclosers in banks are part of the III pillar of BASEL-II floated in 1999, and despite that, banks face challenges in this regard. Ownership concentration (OC) is a point of discussion because it may affect banks’ corporate governance and transparency and disclosures (T&D) issues. This study aims to determine how OC affects the transparency in the banks.

Design/methodology/approach

A T&D index is built into the study covering all the relevant contemporary issues regarding disclosures in banks. The panel data specification is used to find out the association of components of the OC on the T&D practices in the banks. Bank data of 34 banks are gathered for four years for the study.

Findings

It is found that except for retail investors, other classes of OC are not concerned with the disclosures in the banks even though substantial financial and non-financial interests are at stake concerning them. The study’s findings suggest framing policies and regulations considering the accountability of promoters and institutional investors for ensuring disclosures in banks.

Research limitations/implications

A few proxies to measure T&D found in the literature have not been used in the study. Similarly, the definition of promoter’s class of investors can be improved.

Originality/value

To the best of the authors’ knowledge, no other study builds T&D for banks and examines their impact because of the ownership classes (as used by the current study). This study is unique in this aspect.

Details

Corporate Governance: The International Journal of Business in Society, vol. 23 no. 1
Type: Research Article
ISSN: 1472-0701

Keywords

Article
Publication date: 8 August 2023

Shailesh Rastogi and Jagjeevan Kanoujiya

The nexus of commodity prices with inflation is one of the main concerns for a nation's economy like India. The literature does not have enough volatility-based study, especially…

Abstract

Purpose

The nexus of commodity prices with inflation is one of the main concerns for a nation's economy like India. The literature does not have enough volatility-based study, especially using the multivariate GRACH family of models to find a link between these two. It is the main reason for the conduct of this study. This paper aims to estimate the volatility effects of commodity prices on inflation.

Design/methodology/approach

For ten years (2011–2022), future prices of selected seven agriculture commodities and inflation indices (wholesale price index [WPI] and consumer price index [CPI]) are gathered every month. BEKK GARCH model (BGM) and DCC GARCH model (DGM) are employed to determine the volatility effect of commodity prices (CPs) on inflation.

Findings

The authors find that volatility's short-term (shock) impact on agricultural CPs to inflation does not exist. However, the long-term volatility spillover effect (VSE) is significant from commodities to inflation.

Practical implications

The study's findings have a significant implication for the policymakers to take a long-term view on inflation management regarding commodity prices. The findings can facilitate policy on the choice of commodities and the flexibility of their trading on the commodities derivatives market.

Originality/value

The findings of the study are unique. The authors do not observe any study on the volatility effect of agri-commodities (agricultural commodities) prices on inflation in India. This paper applies advanced techniques to provide novel and reliable evidence. Hence, this research is believed to contribute significantly to the knowledge body through its novel evidence and advanced approach.

Details

Journal of Economic and Administrative Sciences, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2054-6238

Keywords

Article
Publication date: 2 November 2022

Shailesh Rastogi and Jagjeevan Kanoujiya

This study aims to determine the association of Transparency and Disclosure (TD) with financial distress (FID) while the competition (as Lerner Index) moderates the association…

Abstract

Purpose

This study aims to determine the association of Transparency and Disclosure (TD) with financial distress (FID) while the competition (as Lerner Index) moderates the association between the two.

Design/methodology/approach

The panel data analysis (static model) is performed to examine the effect of disclosures on the bank's FID. A TD index is built to assess the level of TD. All three versions of Altman's Zscore are employed to measure a bank's FID (High Zscore is opposite of FID). The data of 34 banks running in India for the timeframe 2015–16 to 2018–19 is utilized. Lerner index (LI) is taken as the moderator. The bank-size, valuation and financial leverage are control variables.

Findings

There exists no linear connection between TD and FID. However, TD is positively associated with financial stability (opposite FID). It means TD initially reduces financial stability and improves it after TD crosses a threshold level. Competition (as LI, where the higher value of LI means reduced competition) negatively moderates the association of TD with financial stability. Hence, the findings of this study support the competition-fragility premise. Surprisingly, the negatively significant interaction term of LI and TD implies either high competition and high TD or low competition with low TD, which helps in the bank's financial stability.

Originality/value

The findings provide input to a long-term policy of disclosures and competition in the banking sector, keeping in view the financial stability of the banks. Therefore, findings are novel and carry immense value to the existing knowledge on the topic.

Details

Asian Review of Accounting, vol. 30 no. 5
Type: Research Article
ISSN: 1321-7348

Keywords

Article
Publication date: 24 July 2023

Shailesh Rastogi, Kuldeep Singh and Jagjeevan Kanoujiya

The study intends to determine the environment, social and governance (ESG)'s impact on the firm's value. In addition, how ownership concentration (OC) and transparency and…

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Abstract

Purpose

The study intends to determine the environment, social and governance (ESG)'s impact on the firm's value. In addition, how ownership concentration (OC) and transparency and disclosures (TD) influence the impact of firm's ESG on its valuation (firm value).

Design/methodology/approach

The relevant panel data with a sample of 78 Indian firms for five years (2016–2020) are gathered. Both linear and nonlinear connections of firm's ESG with its value are tested. In addition, TD and two components of OC (stakes of promoters and institutional investors) are empirically tested as moderators on the connectivity of the firm's ESG with its value.

Findings

The linear association of firm's ESG with its value is found insignificant. ESG is found to have a positive and nonlinear (U-shaped) impact on the value of the firms. TD does not moderate the connectivity of firm's ESG with its valuation (firm value). The higher stakes of promoters positively affect the association of firm's ESG with the valuation. However, the high stakes of institutional investors retard the ESG's influence on the firm value.

Research limitations/implications

The study is on Indian firms for five years. A sample of more than one nation and a longer duration (10 years) could have helped better determine the associations among the variables. In turn, these limitations can be the present study's future scope. In addition, the authors find a lack of standardisation of the ESG scales, which is a problem in measuring it. Using standardisation scales of ESG for the analysis can also be future scope on the topic.

Practical implications

The investors would be wary of the level of ESG to influence the firms' value positively. Managers also need to be careful to have sincere efforts for ESG to reap its rich dividends. Policymakers may take cognisance that despite having board seats (in a few cases), institutional investors negatively (instead of positively as expected) influences the ESG's association with the firm's value. They may bring some guidelines or legislative changes to fix responsibility on the part of the institutional investors.

Originality/value

No study reports the linear and nonlinear association of ESG on the firm's value to observe clearer connectivity between the two. Similarly, no study is observed to have promoters and institutional investors as moderators on the association of firm's ESG with the valuation (firm value). Hence, the present study considerably augments the extant literature on the topic and its contribution.

Details

Asian Review of Accounting, vol. 32 no. 1
Type: Research Article
ISSN: 1321-7348

Keywords

Article
Publication date: 4 October 2022

Jagjeevan Kanoujiya, Kuldeep Singh and Shailesh Rastogi

Ownership concentration (OC) is an essential element of corporate governance (CG) for a firm's performance. The purpose of the study is to investigate the connectivity of OC…

Abstract

Purpose

Ownership concentration (OC) is an essential element of corporate governance (CG) for a firm's performance. The purpose of the study is to investigate the connectivity of OC (particularly considering promoters' holdings) with the firm's financial distress (FD) of non-financial firms (NFF) listed in India.

Design/methodology/approach

The panel data regression analysis (applying quantile regression for the 25th quantile, 50th quantile, and 75th quantile) is employed to inspect the connection between OC (promoters' holdings) and the firm's FD (computed using Altman Z-scores). The data for a cross-section of 78 listed firms (non-financial) in India, considering the time frame of five years (2015–16 to 2019–20), are cumulated for the study. The leverage (leverage ratio), competition (Lerner index), valuation (mcap), sales, and profitability (net profit margin) variables are incorporated as control variables.

Findings

The study's findings reveal that OC (promoters' holdings) positively relates to the firm's FD because OC negatively associates with Zscore (as Zscore is inverse to FD). Additionally, the non-linear association also indicates positive connectivity of OC and Zscore (a U shape association), alternatively showing a negative non-linear connection of OC (promoters' holdings) with the firm's FD (inverse U shape association). This result implies that initially, promoters' holdings enhance the firm's FD, and after a maximum threshold, promoters' holdings start reducing FD in non-financial listed firms in India. The findings also show an interesting aspect of OC at different quantiles. The results indicate that a higher OC is powerful when distress is both high and low to achieve stability. Conversely, less OC among promoters is required to achieve such stability when the distress is medium (50th quantile).

Research limitations/implications

The scope of the study is limited to NFFs listed in India, which is one of the limitations of the present paper. Hence, this does not provide evidence for financial firms. Only one aspect of OC (promoters' holdings) is considered in the current study. However, OC can also be explored for FD in terms of institutional and retail investors. These limitations can be considered as the present study's future scope.

Originality/value

Most of the studies regarding OC have explored the broader aspect of OC. However, the current study has narrowed the OC to promoters' holdings. No other study exclusively examines the association of OC (as promoters' holdings) with the firm's FD. Promoters' holdings have a more significant role in a firm's CG practices because of direct involvement of promoters' holdings in business activities. Thus, the present study's findings have notable implications for managers, policymakers, and investors concerned with the financial health of firms.

Details

Managerial Finance, vol. 49 no. 4
Type: Research Article
ISSN: 0307-4358

Keywords

Article
Publication date: 8 September 2022

Shailesh Rastogi and Jagjeevan Kanoujiya

This study aims to analyze the volatility spillover effects of crude oil, gold price, interest rate (yield) and the exchange rate (USD (United States Dollar)/INR (Indian National…

Abstract

Purpose

This study aims to analyze the volatility spillover effects of crude oil, gold price, interest rate (yield) and the exchange rate (USD (United States Dollar)/INR (Indian National Rupee)) on inflation volatility in India.

Design/methodology/approach

This study uses the multivariate Generalized Autoregressive Conditional Heteroscedasticity (GARCH) models (Baba, Engle, Kraft and Kroner [BEKK]-GARCH and dynamic conditional correlation [DCC]-GARCH) to examine the volatility spillover effect of macroeconomic indicators and strategic commodities on inflation in India. The monthly data are collected from January 2000 till December 2020 for the crude oil price, gold price, interest rate (5-year Indian bond yield), exchange rate (USD/INR) and inflation (wholesale price index [WPI] and consumer price index [CPI]).

Findings

In BEKK-GARCH, the results reveal that crude oil price volatility has a long time spillover effect on inflation (WPI). Furthermore, no significant short-term volatility effect exists from crude oil market to inflation (WPI). However, the short-term volatility effect exists from crude oil to inflation while considering CPI as inflation. Gold price volatility has a bidirectional and negative spillover effect on inflation in the case of WPI. However, there is no price volatility spillover effect from gold to inflation in the case of CPI. The price volatility in the exchange rate also has a negative spillover effect on inflation (but only on CPI). Furthermore, volatility of interest rates has no spillover effect on inflation in WPI or CPI. In DCC-GARCH, a short-term volatility impact from all four macroeconomic indicators to inflation is found. Only crude oil and exchange rate have long-term volatility effect on inflation (CPI).

Practical implications

In an economy, inflation management is an essential task. The findings of the current study can be beneficial in this endeavor. The knowledge of the volatility spillover effect of all the four markets undertaken in the study can be significantly helpful in inflation management, especially for inflation-targeting policy.

Originality/value

It is observed that no other study has addressed this issue. We do not find any other research which studies the volatility spillover effect of gold, crude oil, interest rate and exchange rate on the inflation volatility. The current study is novel with a significant contribution to the vast knowledge in this context.

Details

South Asian Journal of Business Studies, vol. 13 no. 2
Type: Research Article
ISSN: 2398-628X

Keywords

Article
Publication date: 26 May 2022

Shailesh Rastogi and Jagjeevan Kanoujiya

The purpose of the study is to explore the association of disclosures for the performance of banks in India.

Abstract

Purpose

The purpose of the study is to explore the association of disclosures for the performance of banks in India.

Design/methodology/approach

Panel data analysis (utilising static and dynamic models) is applied on the data of 34 Indian banks (for time-frame 2015–2019) to explore the association of disclosures (as transparency and disclosure index) with the performance of banks (as profitability, risk-taking and technical efficiency (TE)). The regulation, competition and ownership concentration variables are taken as control variables.

Findings

None of the banks' performance measures applied in the study is significantly associated with the disclosures. This situation implies that disclosures do not impact the performance of the banks in India. The reason is that disclosures and performance are two different activities that aim at different purposes.

Research limitations/implications

This study does not provide output for the association between disclosures and the value of the banks and confines itself to explore the association between disclosures and performance of the banks only. This limitation can be the future scope of the study.

Originality/value

There is no other study that solely focuses on exploring the association of disclosures with the performance of the banks. Disclosure has more significant importance in banks because of the inherent nature of opaqueness in banking operations. Therefore, the current study's findings have substantial implications for policymakers, managers and investors of the banks.

Details

International Journal of Productivity and Performance Management, vol. 72 no. 9
Type: Research Article
ISSN: 1741-0401

Keywords

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