Search

The increasing significance of intellectual capital as a fundamental driver of organizational success has spurred a growing body of research focused on its measurement and impact on financial performance and market valuation. This paper provides a thorough review of the literature on this topic, with particular attention to the use of the Value-Added Intellectual Coefficient (VAIC) model. The review spans a diverse array of studies published in academic journals, books, and conference proceedings. By analyzing these studies, the paper uncovers the theoretical foundations, methodologies, and findings related to the application of the VAIC model in assessing the influence of intellectual capital on financial performance and market valuation. Overall, the findings indicate a positive relationship between intellectual capital, as measured by the VAIC model, and financial performance indicators such as profitability, productivity, and efficiency. Moreover, there is evidence supporting a positive connection between intellectual capital and market valuation, suggesting that investors recognize and reward firms with higher intellectual capital. Nonetheless, the review also highlights several limitations and challenges in the literature, including the inconsistencies in the operationalization of intellectual capital, the complexities of measuring intangible assets, and the potential endogeneity between intellectual capital and financial performance metrics. This review contributes to the existing knowledge base by synthesizing the findings from previous studies and outlining directions for future research. [ABSTRACT FROM AUTHOR]

Over the past few decades, the mutual fund industry has witnessed significant growth. Against this backdrop, the paper examines the factors that have facilitated this growth with the objective of providing policy directions. Using a panel of 38 countries for a period of 17 years, the paper conducts an econometric analysis, controlling for country-level heterogeneity, simultaneity bias and endogeneity problems. The results reveal that demand-side factors of income and wealth, real interest rate and investor awareness explain substantial variation in the growth of the industry. On supply side, the main facilitating factors are depth and efficiency of financial institutions and depth of financial markets. The results further reveal that to sustain the growth momentum, advanced countries must manage better the overall demand-side factors, while developing countries must focus on financial development and growth and manage investors' sense of confidence. [ABSTRACT FROM AUTHOR]

This paper examines the cause-effect relationship between information technology (IT) stock index and currency exchange rate through application of Granger causality test and vector autoregression (VAR) model. The study specifically focuses on two crucial variables, IT stock index level and the currency exchange rate of USD to INR. By examining the presence of causality between these two variables, the paper aims to determine whether past values of the IT stock index hold significant predictive information for currency exchange rates and vice versa. The study employs a comprehensive dataset encompassing historical data for these variables and presents the outcomes derived from the Granger causality test. The results identify bidirectional causality and offer implications for investors and financial analysts seeking insights into the interplay between IT stock index and currency exchange rates. We conclude that it is possible to predict index movements using exchange rate movements with a certain level of accuracy. [ABSTRACT FROM AUTHOR]

This paper investigates the connection between traditional equity-based mutual funds and sustainable equity-based mutual funds by comparing them with reference to their returns, risk, risk adjusted returns and other parameters. The study draws an analogy between equity-based ESG mutual fund schemes and traditional flexicap schemes; and evaluates the performance of ESG mutual fund schemes in India. It found that the annualized return of sustainable funds has surpassed that of traditional flexicap funds. Similar results are displayed when risk adjusted return is taken into account, showing that the performance of sustainable ESG funds is generally superior to that of traditional mutual funds. The study's findings and conclusions have important implications for investors. It also adds to the body of knowledge on sustainable investment for academics and recommends that future research on the subject take into account ESG performance analysis when evaluating sustainable investments. [ABSTRACT FROM AUTHOR]

The paper investigates the impact of negative and positive returns of NSE index Nifty 500 on Nifty 100 ESG. The study covers eleven years, from January 1, 2013, to December 31, 2023. Two techniques, E-GARCH and T-GARCH, were employed to determine the impact. The results showed no asymmetric impact on Nifty 100 ESG Index due to changes in Nifty 500. Moreover, no evidence of asymmetric causality was seen between the two indices. Further, the GARCH term in ESG index volatility equation was <1, showing persistence goes away over time. The study identified the best model as AR (1)-GARCH (1,1). The model additionally revealed the lagged dependency of Nifty 100 ESG on Nifty 500. The study gives two encouraging signals: first, the nonexistence of asymmetric returns for ESG Index would give confidence to investors as the impact of bad news is not visible; and second, the lagged dependency of Nifty 100 ESG on Nifty 500 index shows the maturity of investors in not reacting immediately to a change in Nifty 500 Index. [ABSTRACT FROM AUTHOR]

Accounting literature boasts a long list of studies on the impact of earnings information on stock prices. Recently, this strand of literature has been given a new twist by exploring the dynamics of earnings-returns relation at the aggregate level. The knowledge about this relationship is particularly useful for investors who hold diversified portfolios. The paper tests if the aggregate earnings-returns relationship is different when stocks are grouped according to different characteristics such as size, value, profitability and investment. The results suggest that the relation between aggregate earnings and stock returns is relatively stronger for large-cap and growth stocks as compared to small-cap and value stocks. These findings are valuable for investors and fund managers who use factor-based strategies to manage their investments. [ABSTRACT FROM AUTHOR]

The size of green bond market has been increasing rapidly since the Paris Agreement on climate change was adopted in 2015. This paper is an empirical study on the public companies that have financed greenfield projects through green bonds. The study is based on equity investor behavior following the news announcement of green bonds. An event study approach is applied to find out the impact on abnormal returns of stocks during the window period of the announcement day. The study supports that stock return behavior is positive, which is an indication that investors responded positively to the announcement of green bonds. Leverage analysis is also performed, and it is found that the financial leverage increased in the post-issue period of green bonds. It is an indication that the use of low-cost security in financing the greenfield projects is capable of maximizing shareholder returns, if the return on investment is more than the cost of green bonds. This paper adds to the existing literature as it focuses on the stock performance of public companies around green bond issuance announcement. Further, the analysis of financial leverage of the firms distinguishes this study from others. [ABSTRACT FROM AUTHOR]

The paper examines investor behavior towards systematic investment plan (SIP) in mutual funds (MF) and the factors that encourage investors to invest in the same. Snowball sampling technique was used for collecting data from 200 respondents from Karad city, Maharashtra. The data was analyzed using various statistical tools like Karl Pearson correlation coefficient (r) matrix and regression model. It is found that gender and education show a negative relationship with investment in SIP, indicating that these variables have an insignificant negative correlation. Income has positive relationship with investment in SIP, which means there is a significant positive correlation among the variables. [ABSTRACT FROM AUTHOR]

In India, Goods and Services Tax (GST), introduced on July 1, 2017, has immensely affected the functioning and financial performance of different manufacturing companies. DuPont analysis model is used in this paper for scrutinizing the essential financial performance of such companies. It is an expedient system for decomposing the different drivers of Return on Equity (ROE) that help investors to focus on the key financial aspects, demonstrating the strengths and weaknesses of different companies. The study empirically analyzes the impact of GST on the financial performance of selected manufacturing companies in India, using five-step DuPont model, whereby the Net Income Margin has been brokendown to demonstrate how tax and interest affect ROE, considering financial performance before and after implementation of GST. Moreover, statistical tools like mean, standard deviation, paired correlation, matrix paired t-test and ANOVA test have been used to analyze the data and justify the objectives of the study. [ABSTRACT FROM AUTHOR]

Exchange-traded funds (ETFs) offer investment opportunities to investors by investing in a portfolio of assets that trade on the stock market and diversify risk. This paper investigates the tracking errors in ETFs by selecting a sample of five ETFs listed on NSE of India, and the daily data of these ETFs is collected from the websites of NSE and Yahoo Finance. The tracking error is measured using multiple models. The results reveal that ETFs do not perfectly mimic the underlying index; all of them have significant tracking errors. [ABSTRACT FROM AUTHOR]

Investing in index funds provides the investors an opportunity to invest in a bunch of stocks falling under the same umbrella. Investors reap some advantages in investing in an index rather than in individual stocks. With this perspective, BSE took the initiative to provide a platform for investors to invest in a group of listed IPO companies and launched the S & P BSE IPO Index in the year 2009. In this paper, an attempt has been made to understand the differences in returns generated by S&B BSE IPO Index by considering the PE ratios. The difference in returns generated by this Index and the listing-day and longterm returns generated were studied. And also, the difference in terms of the risks of investing in the S&B BSE IPO Index and the listing-day and long-term risks of stocks that issued IPOs have been measured. [ABSTRACT FROM AUTHOR]

Innovation is undeniably indispensable for corporations to survive and sustain in the long run, especially in extremely competitive business environments. Thus, investing in innovation through Research and Development (R&D) and the role of Corporate Governance (CG) as a supervisory and controlling mechanism in this regard are important facets of business strategies. The main objective of this paper is to examine the impact of CG on R&D expenditure and subsequently evaluate its effect on financial performance through value-based performance measures like Economic Value-Added (EVA), on a sample of NSE 500 listed companies of India. Additionally, the impact of interaction effect of CG mechanism with R&D investment on EVA is assessed. The empirical test through panel regression modeling reveals that various CG mechanism variables determine the level of R&D investment, which is used as a proxy for innovation investment. Further, R&D investment has insignificant negative impact on EVA of sample firms. However, interaction effect of CG variables on R&D is significant in contributing to economic value addition of stakeholder’s interest. The study will be of use to investors, fund managers and other stakeholders for better and informed decision-making and will also assist policymakers in developing a better code of governance for protecting and enhancing shareholder interests and value in the Indian corporate setting. [ABSTRACT FROM AUTHOR]

Initial Public Offering (IPO) is a fund-raising tool through which a company gets listed for the first time under SEBI regulation and issues IPOs to raise funds from the public. The shift from a privately-owned to a publicly-owned firm via an IPO is the most significant event in a company's life (Pagano et al., 1998). In an IPO investment, there is limited historical data to analyze and predict the future performance of the company; hence it becomes a risky investment for the investors as they cannot predict how the shares will perform in the future. Most companies that go for an IPO are in the growth or expansion phase so it becomes more difficult to predict their market position and performance in the future, which leads to uncertainty in deriving their future value. Also, most IPOs are of companies going through a transitory growth period, and are therefore subject to additional uncertainty regarding their future value. This study analyzes the performance of the IPOs issued during the Covid-19 pandemic, when the markets across the world faced massive disruptions. The IPOs from various sectors like finance, technology, service, infrastructure, food, pharmaceutical and information technology were considered for the study. The study also analyzes the factors affecting investor perception towards investment in an IPO. The study considered the IPOs issued during the pandemic, and their performance on the listing day was measured by considering issue price, listing price and closing price. It was observed that 90% of the IPOs selected performed well during the listing day and 10% underperformed. It was also found that factors like company brand, company sector, fundamental analysis, company ratings, expert opinion and stock market conditions had a positive impact on the investors' decision to invest in an IPO. The study also revealed that factors like risk factor in primary market, returns on IPO on the listing day and Gray Market Premium have no significant impact on the investors' perception. [ABSTRACT FROM AUTHOR]

The global community was rocked by the Covid-19 pandemic, and everyone had to deal with problems like unemployment, lockdowns and slowing economies. The impact of the pandemic on the efficacy of financial derivatives as hedge instruments utilized by businesses is the focus of this study. Understanding the precise impact of a crisis like this on a company's value is beneficial to investors and businesses. It also enables them to better equip themselves for any future crisis of this nature and helps them modify their plans, procedures and guidelines for better risk management. The effectiveness of financial derivatives used as hedges by all Indian manufacturing companies listed on BSE and NSE has been examined in the study. Additionally, it attempts to test empirically the various factors influencing the use of derivatives. The entire period is divided into three phases: the pre-crisis phase (March 2016-March 2020), the Covid-19 crisis phase (April 2020-March 2021), and the post-crisis phase (March 2022-March 2023). The study also tests the model using 2SLS Regression analysis to verify robustness and check for endogeneity. The findings show that during noncrisis periods, hedgers who employed financial derivatives achieved a higher firm value than nonhedgers, but they did not earn profit during the crisis. [ABSTRACT FROM AUTHOR]

This study investigates the impact of momentum investment strategy, as introduced by Jagadeesh and Titman (1993), on significant stock returns at the National Stock Exchange (NSE) from January 2005 to December 2020. To examine the significance of stock returns, the study considers monthly stock prices of the highly liquid and traded 500 stocks (Nifty 500). Independent sample t-tests at 0.05 significance level are used to comment on the significance of the findings. The results reveal that momentum investing strategy yields superior stock returns during bear phases of the Indian stock market, compared to bull phases and overall market performance. These returns are very robust with trailing 12 months tracking period for investment decision making. These findings have implications for investors, portfolio managers, and investment advisers. Given India's status as a significant emerging country, the study's findings have larger implications for institutional wealth managers and global portfolio flows, helping to create wealth on a worldwide scale. [ABSTRACT FROM AUTHOR]

Behavioral finance is a growing research area within finance, though there are still many questions about its true value. Unlike the efficient market hypothesis (EMH), behavioral finance highlights the irrational behaviors investors exhibit when choosing among various investment options. This bibliometric study explores the studies published between 1980 and 2023 on behavioral finance. By employing citation and co-citation analysis, the study identifies the most frequently cited works and current trending topics in the field. The study used Dimensions database and 2,500 documents were considered for analysis to pinpoint relevant journals, and it was concluded that "Behavioral Finance" is an emerging field worth focusing on in the Indian context. The study may help researchers to broaden their investigations, using both quantitative and qualitative methods, to better understand the factors influencing the broader scope of behavioral finance. [ABSTRACT FROM AUTHOR]

This study examines the impact of legal environment and status of development on the environmental, social, and governance (ESG) score, a measure of ESG engagement, of firms operating in G20 countries. Using a sample data, from 2010 to 2021, of 2,234 listed firms from 19 sovereign countries of the G20 group, including both developed and developing countries, and using a Tobit dummy regression framework, the study shows that when the countries have a strong legal environment (as measured by common law), the ESG performance of firms improves, as evident from their improved ESG score. Further, the study reports that the ESG score of firms from developed countries is better than that of those from other members of the G20 group, and the positive association between ESG score and law increases substantially when the firms are operating in a developed country. The findings can guide regulators and policymakers to help improve the ESG performance of firms by improving the legal system of the country and by enhancing its development. Further, all categories of investors can get insights on the ESG performance of firms on the basis of the country they operate in and the law prevailing there. [ABSTRACT FROM AUTHOR]

Extreme events such as a market crash, an economic downturn, a geopolitical war, or a situation emanating from a health crisis have proved to inflict far-reaching adverse impacts on an economy, depending on the country's market microstructure. This becomes more important due to the increasing interconnectedness across global financial markets and subsequent financial contagion. As such, it becomes imperative to quantify the relevant risk (i.e., tail risk) arising out of such events. This study examines the phenomenon of tail risk in the Indian stock market from sectoral returns, using extreme value theory (EVT). The study uses returns of 11 sectoral indices of Nifty from 2006 to 2023, and estimates the tail risk measure each quarter using a peak-over threshold approach following prior literature (Hill, 1975). It also investigates the impact of estimated tail risk on expected future returns of the respective sectoral indices. The results revealed the tail risk estimates (at 5% threshold of cross-sectional sectoral returns) to be significant. Further, tail risk positively impacts the expected Nifty sectoral returns, and the impact is robust even after controlling for macroeconomic factors like inflation, short-term interest rate, and long-term interest rate. The results of the study would help investors adopt better risk management practices and help regulators conduct stress tests to understand potential risk scenarios. [ABSTRACT FROM AUTHOR]

This research note focuses on the implementation of Indian Accounting Standards (Ind AS) for non-banking financial companies (NBFCs) in India. It explains that NBFCs were required to adopt Ind AS gradually for their financial statements. The note introduces the concept of total comprehensive income (TCI), which includes both profit or loss and other comprehensive income (OCI). The note presents findings from a study on how NBFCs report OCI in their income statements, highlighting the direction and size of OCI. The study reveals that OCI's contribution to TCI was not significant in the first year of Ind AS implementation. The article also discusses the common ways in which NBFCs report OCI, such as mentioning each component of OCI and providing an aggregate income tax amount. The analysis shows that net gain/loss on remeasurements of defined benefit plans and fair value gain/loss on equity investments through OCI are the most frequently reported items by NBFCs. Overall, reporting OCI enhances transparency in performance statements and supports the definition of income. [Extracted from the article]

The study investigates the impact of demographic factors and emotional biases on retail investors’ investment decisionmaking and behavior. The study finds a significant relationship between educational qualification and investment behavior, and no significant relationship between age or savings frequency and investment behavior. Loss aversion, self-control, and regret aversion are identified as significant biases, while endowment bias and herding bias, though significant, have a negative effect. The study suggests that to make informed investment decisions, investors should be aware of their emotional biases and stop rationalizing their irrational behavior. Understanding these factors can help investors in making more informed decisions, ultimately leading to better financial outcomes. The findings offer practical insights to investors and financial professionals to mitigate bias effects. [ABSTRACT FROM AUTHOR]

This study seeks to test the efficient market hypothesis (EMH) in the Nigerian stock market. The test is based on the notion that in an efficient market, the prices fully reflect 'all the securities' available information. It examines if there is a correlation between the expected returns on assets in consecutive periods, how asset prices adjust to reflect new information and how investors perform. The study employed descriptive research method and quantitative technique. It also employed all share index (ASI) to measure the stock market in terms of magnitude and direction. Augmented Dickey-Fuller (ADF) and Philips-Perron (PP) tests were applied to test the unit root. Runs test was used to test randomness in share price movements. The results for ADF and PP indicated presence of random walk, while the results for runs test indicated no random walk and hence a presence of weak form inefficiency. [ABSTRACT FROM AUTHOR]

Byju Raveendran founded Byju's in 2011 and launched a learning app in 2015 that promised personalized, interactive and adaptive learning benefits for school students. The Byju's app found many takers. Even venture capitalists got interested in Byju's and India's edtech growth story and poured millions of dollars into the company. The Covid-19 pandemic impacted the world of education in a big way. Learning online was the new normal and Byju's was among the harbingers of this change. Buoyed by the growing demand for its courses, Byju's attracted more venture funding. Flushed with funds it went on an acquisition spree to expand its offerings into different domains and its business into foreign countries. Its valuation continued to increase, reaching $22 bn in 2022. After the end of the pandemic, online teaching and learning took a backseat. This started impacting Byju's, as students stopped renewing their subscriptions. The investors were unhappy with the company's delaying the announcement of financial results year after year and started demanding higher interest and prepayment of loans. The auditor, Deloitte, severed its ties with Byju's, citing its inability to conduct an audit. Three directors representing the leading investors in the company resigned from the board. Raveendran needed to address the challenges and steer the company ahead. [ABSTRACT FROM AUTHOR]

The study examines the often-overlooked aspect of board attendance stability within the context of corporate governance in Indian companies. The study uses data from the Center for Monitoring Indian Economy (CMIE) database covering NSE-500 companies from 2010 to 2022. The Board Attendance Stability Measure (BASM) is presented to evaluate the consistency of board attendance over time. Using an empirical model, the study examines the relationship between board attendance stability and several significant variables such as board independence, meeting frequency, ownership structure, leverage, firm age, and profitability. The findings indicate that board independence and company age positively correlate with BASM, thereby increasing attendance stability. In contrast, an increase in board size, meeting frequency, and promoter ownership has a negative impact on BASM. Intriguingly, leverage does not affect BASM, whereas profitability, measured by return on assets (ROA), positively correlates with attendance stability. The findings provide valuable insights for academics, researchers, investors, lenders, and policymakers by highlighting the role of board attendance stability in determining corporate governance outcomes. The study contributes to the corpus of corporate governance literature, particularly in the context of an emergent market, informing good governance practices and opening the door to future research. [ABSTRACT FROM AUTHOR]

The present study seeks to examine the implication of iconic investing strategies conceptualized by Graham et al. (1934), Piotroski (2000) and Greenblatt (2006) for significant stock returns on the National Stock Exchange of India (Nifty 500) during the study period 2005-2020. The significance of stock returns, based on the monthly stock prices of sample 500 stocks listed on the NSE from January 2005 through December 2020, was studied using independent t-test at 0.05 level of significance. Based on the research outcomes of this study, Piotroski (2000) value investing strategy reported better stock returns in the Indian stock market during the study period, compared to two other peer value investing strategies. The findings have wider implications for investors, portfolio managers, and investment advisors for superior return generation in the Indian equity market. India being a large-sized emerging economy, these findings also have wider implications for institutional wealth managers and portfolio flows for wealth creation across the globe. [ABSTRACT FROM AUTHOR]

This study examines the effect of economic variables and investors' behavior on monthly returns from Indian stock market. The results show that the growth in industrial production did not have significant effect on such returns during the pre-pandemic as well as pandemic period, whereas the net inflows from foreign institutional investors (FIIs) in equity shares listed in India effected returns on BSE 500 significantly during both the periods, but the effect of FII investments in equity shares on such returns decreased during the pandemic period, except during January to March 2020. Interestingly, the flight of FII investment out of India in March 2020 exerted much higher effect on such returns. During the entire period of study, net investments by domestic mutual funds (MFs) in equity shares listed in India were found to be highly negatively correlated with net inflows from FIIs in equity shares listed in India, implying that the former variable might have shown opposite effect on returns on BSE 500. [ABSTRACT FROM AUTHOR]

India's automobile sector is one of the world's strongest and most rapidly developing sectors. India surpassed Germany and Japan to become the thirdlargest vehicle market globally as of 2022. In India, the automobile industry is valued at over $100 bn, accounts for 8% of the nation's total exports, and generates 2.3% to GDP. Although considered risky, the equity market is regarded as one of the most lucrative options for investment purposes. Investors must do a common stock analysis and comprehend the attributes associated with risks and returns of equity share valuations and sectors in which they choose to invest. This study examines the valuation of equity shares of automobile companies listed on the National Stock Exchange in India. The study will be of use to prospective investors in making well-informed and logical investment decisions. [ABSTRACT FROM AUTHOR]

This study examines the impact of Bank Diversification (Div) on Financial Soundness (BFS) and also investigates the moderating effect of CEO characteristics on this relationship in Egypt. The data was collected from annual reports of a sample of Egyptian banks from 2014 to 2021. The study uses Generalized Method of Moment (GMM) for testing the research hypotheses. The results of the study show a positive effect of Div on BFS. Also, the results reveal that CEO gender, nationality, and tenure strengthen the positive effect of Div on BFS, while CEO duality weakens this positive effect. The present study offers new empirical evidence for the impact of Div on BFS from a cash flow perspective. Also, the study contributes to the banking governance literature by providing new empirical evidence from an emerging market like Egypt regarding the impact of CEO characteristics on the link between Div and BFS (cash flow perspective). The study will be of help to managers, investors, and depositors realize the importance of cash flow as an indicator of BFS, especially in emerging markets like Egypt. Also, the findings would help policymakers and regulators (the Central Bank of Egypt) realize the role of Div in supporting BFS, improving bank financial stability, and increasing market discipline. [ABSTRACT FROM AUTHOR]

The study examines the market performance in terms of stock selection and market timing skills of fund managers before, during and after the Covid-19 pandemic, with reference to selected small, mid and large cap mutual fund schemes. The study further investigates the presence of small firm effect in the Indian context by testing if small capitalization schemes of a fund house exhibit better performance than its large cap schemes. Performance evaluation has been conducted using Jensen's differential model, Treynor-Mazuy model and Henriksson-Merton model. A majority of the fund managers were successful in stock selection by identifying the underpriced securities during the pre-Covid and post-Covid periods. However, a majority of the schemes exhibited perverse market timing skills during the post-Covid period, while there was no significant evidence of market timing skills during the pre-Covid and Covid periods. The study provides valuable insights on fund performance, which can help investors to make informed decisions, fund managers to revisit their performance, and regulators to ensure a better policy framework. [ABSTRACT FROM AUTHOR]

Generating the best returns commensurate with the risk appetite is very important for an investor in capital markets. After determining the past returns and risk behavior of a stock and assuming it to be the same in the future, optimal portfolio strategies can be worked out for different investment objectives. While it is known that expected returns and expected risks go hand in hand, there is no existing literature that has examined the exact nature of the relationship between the risks and returns on optimal portfolios in the Indian capital market. Therefore, this study examines the dynamics of risk-return relationship in the case of optimal portfolios designed for different objectives, and also validates the efficient frontier for the Indian capital market. It shows that the improvement in the returns of optimal portfolios happen at a decreasing rate with the increase in the risk appetite of an investor, indicating the nonlinear relationship between risks and returns. The implications for managers and investors have also been discussed. [ABSTRACT FROM AUTHOR]