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The present study examines the relevance of Corporate Social Responsibility (CSR) expenditure to the firms in the mandatory regime in India. The paper has its theoretical basis from the instrumental aspect of the Stakeholder theory, which assumes a positive influence of CSR over financial performance. Therefore, the study hypothesizes that the firms which fulfil the CSR expenditure requirement will exhibit higher stock returns and lower systematic risk. Since India mandated CSR in the year 2014, the data of four years (2016-2019) for the sample of 426 National Stock Exchange (NSE) listed Indian firms are taken to employ the OLS regression method. The CSR expenditure in the mandatory regime was not found to be relevant to the firms because of an insignificant positive impact of mandatory CSR expenditure on stock returns. Thus, the instrumental aspect is not supported by the findings. However, the findings indicate a decrease in the systematic risk of the firms. Only a few studies in India investigated this phenomenon in the mandatory regime. Further, the contributions of the study to the CSR literature are fairly useful from the perspective of firms, investors, policy-makers, regulators, scholars, and countries that are planning for legislating CSR. [ABSTRACT FROM AUTHOR]

The objective of this paper is to investigate if an accounting-based fundamental analysis strategy can help investors earn excess returns on a portfolio of high book-to-market companies in India. The strategy we adopt is based on Piotroski (2000) who identified 9 fundamental signals to form a composite score (F̱SCORE) capable of separating out ex-post winners from losers among high book-to-market companies in the US stock market. However, it is not clear whether the results of such a strategy could be directly applied to Indian stock markets,since there is evidence that market efficiency in India is at the most weak form. Also, during the 1990s when trading and investments were mostly domestic, the markets experienced scams like the Harshad Mehta scam. However, of late, India has been among the most favoured investment destinations in the world. Using the F̱SCORE framework from Piotroski (2000) but a different approach to portfolio formation (for practical purposes) we find convincing evidence that a fundamental analysis based investment strategy for high book-to-market companies can separate winners from eventual losers. We show that portfolios with high F̱SCORE (7 to 9) provide excellent returns far superior to market returns and risk-adjusted returns. Portfolios with low F̱SCORE (0 to 3) offer very poor returns and often underperform the markets or required risk-adjusted returns. A value investor could shift distribution of returns rightwards by investing only in high F̱SCORE companies. Shorting low F̱SCORE could further enhance returns. [ABSTRACT FROM AUTHOR]

International Financial Reporting Standards (IFRS) or converged Indian Accounting Standards (Ind AS) and its implications are imperative for Indian companies. India has decided to converge with IFRS, which means that India will have its own converged standards in line with the IFRS. On January 2, 2015, the Ministry of Corporate Affairs notified (PIB, 2015) that Ind AS would be mandatorily applicable for accounting period ending March 31, 2016 for companies falling under certain classifications. It is expected that once these are implemented, it will have a significant impact on financial statements. The convergence of IFRS will benefit Indian companies as they would be comparable to the peers internationally, which in turn would lead to a greater equity and debt participation by international players, thus making funding easier and cheaper. This paper focuses on two key issues: Are financial statements prepared using the two different standards significantly different? And, is there an increase in equity participation of foreign investors in Indian companies which have adopted IFRS? Companies covered in the study report financial statements as per two accounting standards because they are listed on Indian stock exchange and NASDAQ. Since these Indian companies have dual listing (India and international), on Bombay Stock Exchange (BSE), they report as per Indian GAAP, and as these companies are listed on NASDAQ, they need to prepare financial statement using IFRS. [ABSTRACT FROM AUTHOR]

Purpose: The question of whether socially responsible stocks outperform or underperform general stockshas been of keen interest for various researchers and academicians. This paper seeks to empirically examine the performance of socially responsible portfolios across various sectors and index of socially responsible and general companies in Indian stock market. Design/Methodology/Approach: We have taken up S&P ESG and CNX NIFTY as the indices of socially responsible and general companies respectively. ESG index has been classified into six different sectors on the basis of GICS. Performance has been evaluated in terms of risk, return and various risk-adjusted measures like Sharpe ratio, Treynor ratio, Double Sharpe ratio, Modified Sharpe ratio, M2 measure, Jensen's alpha, Fama's decomposition measure, etc. We have also checked whether market model is sufficient to explain cross sectional variation in stock returns or we need Fama-French three factor model. The study period ranges from January 1996 – December 2013 and it is further divided into different sub-periods. Findings: We find that socially responsible stocks across IT, FMCG and financial sectors are well rewarding in Indian stock market by generating significantly higher returns and outperforming the two indices on the basis of risk-adjusted measures employed during 18 year period and different sub-periods. The results uphold even with the use of market model and Fama-French three factor model by generating highest significant excess returns. Originality/Value: There is no empirical evidence on the performance evaluation of socially responsible portfolios across different sectors. Hence this study is first of its kind. This will help investors in selecting best sector for investment in socially responsible companies. Implications: Significant higher returns of ESG index and socially responsible stocks across different sectors make Socially Responsible Investing (SRI) a betterinvestment vehicle for investors in India. This is the time when general companies should change their approach and agenda towards CSR and start considering ESG issues as their investment themes. The regulators, policy makers and mutual funds should come up with different socially responsible products and sectoral indices to initiate the movement of SRI across different sectors in India. [ABSTRACT FROM AUTHOR]

Purpose – The purpose of this paper is to investigate Indian companies’ compliance with the mandatory and voluntary corporate governance disclosure requirements of the Stock Exchange Board of India’s Clause 49. Design/methodology/approach – The authors develop a corporate governance disclosure index and sub-indices based on Clause 49. Annual reports of listed Indian companies are scored according to their disclosures in two periods – pre and post amendments to Clause 49. Findings – Indian companies are highly compliant with corporate governance disclosure requirements of Clause 49. Disclosure increases significantly after amendments to Clause 49 as the penalties for non-compliance increase in severity. Government controlled firms disclose significantly less than privately owned firms. Research limitations/implications – The findings are consistent with bonding theory and the authors note that the presence of an independent regulator (with powers to take action against violators) provides corporate India with additional incentives to comply with corporate governance reform. Practical implications – These findings have important implications for policy makers and regulators as they contribute to the debate on the choice between formal corporate governance regulation versus informal self-regulation. The study also has implications for understanding factors associated with the adoption of disclosure practices in general. Originality/value – This is the first study to examine disclosure compliance in a major developing country pre and post amendments to mandatory corporate governance requirements. Prior evidence indicates a low level of disclosure in India but our results demonstrate an improvement in line with our theoretical predictions that suggests, India is converging towards an Anglo-Saxon model of corporate governance. [ABSTRACT FROM AUTHOR]

The paper re-visits the stock market reforms with respect to its effects on corporate financing and savings. On account of factors, such as booming stock market and high cost of credit, the corporate financing changed from equity financing during the mid-1980s to debt financing during the mid-1990s. Earlier finding showed that expansion in stock market financing during the 1980s was neither associated with a rise in aggregate GDS nor with an increase in the proportion of financial savings. It is observed that movement of household savings towards stock market did not merely represent a reallocation of households' funds from bank deposits to stock market instruments. It was also accompanied by a rise in the share of aggregate GDS in GDP. Further, while the household sector was more responsive to the stock market reforms from the mid-1980s to the early years of economic reforms, the corporate sector showed greater responsiveness during the post-reform years. [ABSTRACT FROM AUTHOR]

Theoretically, the stock markets are considered as rational and efficient institutions. However, instances of mass hysteria occur when stocks are massively overvalued by the experts and investors leading to disastrous stock market crashes. Predicting the behaviour of stock markets is perhaps one of the most difficult task. Present paper examines the existence of size anomaly in Indian stock market and suggests a trading strategy that could help an investor earn superior returns. A sample of 240 BSE listed companies over a period of six years (September 1996 to September 2002) has been taken. The empirical results undisputedly indicate that the small size firms outperform the larger firms not only on the basis of raw returns, but also on the basis of risk adjusted performance measures. The study indicates existence of size anomaly as the smallest decile has earned four times the mean return of the highest. It also indicates a descending stair-step pattern in the return distribution of different Size portfolios. [ABSTRACT FROM AUTHOR]

Study was carried out based on listing day performance of 80 initial public offerings (IPOs) in India during January, 2011 to June, 2016, listed on National Stock Exchange (NSE), India. It was observed that on an average, returns were positive on the listing day. Sample t-test was applied to verify if, average raw returns and average market adjusted excess returns (MAER) are statistically significantly under-priced or not. MAER of all samples IPOs was 14.01 % for study period and was significant at 1% level. It shows that IPOs were significantly underpriced. Multiple Regression model had been used to analyse the relationship between MAER with independent variables such as issue size, issue over subscription, listing delay, age of firm and post issue promoters' holding. The result of regression analysis shows that there was no significant relationship between MAER and explanatory variables age and post issue promoters' holding. MAER showed significant relationship with issue size, oversubscription and listing delay on listing day. [ABSTRACT FROM AUTHOR]

Interlocking directorates play a crucial role in the corporate governance system. In this paper we analyse the structural characteristics of the network of the interlocking directorate of National Stock Exchange (NSE) listed Indian companies using the tools of social network analysis to examine the effects of the underlying network on the performance of companies and directors. A component analysis of the network shows that 78.5% of the companies fall under one giant component with the largest island containing 6 companies. The giant component was further analysed for clusters and centrality measures. The results show that the highly boarded directors who constitute just 2.25% of the director population are associated with 42% of the total listed companies which account for 65.5% of the total market capitalisation. The top central actors in both director as well as company networks have been identified. The calculated values of mean path length and global clustering coefficient provide evidence for the existence of small world structure in the Indian corporate field. [ABSTRACT FROM AUTHOR]

This paper examines the relationship between the performance and ownership structure of a sample of 98 mid-cap companies listed on the National Stock Exchange (NSE) of India, as mid-cap sector is considered a high growth sector of the economy. In India, the shareholders are broadly divided into two categories-promoter shareholders and non-promoter shareholders. The study results suggest that promoters' shareholding (measure of concentration) is statistically significant in explaining performance. When concentration is treated as endogenous, the same is found to be dependent on performance. The study highlights that the ownership of high growth mid-cap companies of India continues to remain concentrated, even in the post-1992 economic liberalization, impacting the performance amid the general perception that substantial diffuseness has occurred. [ABSTRACT FROM AUTHOR]

Capital expenditure decisions have a long-term effect on the value of the firm. Extant literature posits that stock prices of companies increase very quickly to incorporate such information. However, limited research has been undertaken in this area in India and thus the motivation for the present study. This paper examines stock market reaction to the announcement of 493 capital expenditure decisions made by companies during the period January 1, 2004 to December 31, 2006. An event study methodology is used to examine the share price behavior around such announcements. Results indicate that the market reacts significantly on the day of announcement, thus reflecting that it views such decisions as value enhancing. The study also looks at the size effect of capital expenditure decisions. Results show that the reaction of the Indian stock market is statistically, positively significant for large investments, and positive but insignificant for small investments. The results of the study are in sharp contrast to the international evidence. [ABSTRACT FROM AUTHOR]

The objective of this paper is to examine the association between the Corporate Leverage (cl) and the Dividend Policy (dp) of firms across industries in India in respect of Size of Corporate Firms. The investigation is conducted on a panel sample of 73 firms across industries [Cement, Chemical and Fertilizer, it, Oil and Gas, Pharmaceutical, Shipping, and Textiles], which listed their shares in National Stock Exchange (nse) in India for the period 1996-2007. The impacts of Capital Structure (cs) variables (leverage) on dp measures - dividend payout (Net dividend paid/net income) in the presence of some basic fundamental variables are considered to be the determinants of dp, using the Multiple Regression Technique (ols method). The results of the cross-sectional ols Model for the selected sample firms under various sectors show that there is a significant effect of selected independent variables, dpoα+β1dpot-1 +β2pat+β3tde+β4cf+β5size+β6inv+ β1ltd + β8std + e. Therefore, this study proves that the dp of Small Size, Medium Size, Large Size, and Overall Corporate Firms across industries in India is dependent on the level of debt in cs. [ABSTRACT FROM AUTHOR]

We examine the determinants of intercorporate investments for a sample of 127 firms listed in the National Stock Exchange (NSE) in India for the period 2015–2019. This research indicates that the investor firm's intercorporate investments are influenced by free cash flows, dividend yield, promoter holding, and leverage. Interestingly, contrary to anecdotes in the financial press, the investor firms where promoter holding (equity) is more, prefer to invest less in the other firm's capital (as part of intercorporate investment). Using OLS regression, this analysis does not find evidence for the variables, that is, the firm's age, the capital expenditure required, growth in earnings per share, board independence, and CEO duality for significant influence on intercorporate investments. Further tests for industry effect reveal the consumer and retail sector's intercorporate investments to be significantly different (i.e., lower) from the manufacturing and service sectors. [ABSTRACT FROM AUTHOR]

This study provides fresh empirical evidence on the influence of various financing sources on firms' technology investments and exporting decisions using a panel of firms from the service sector in India during the period 1999–2010. Allowing both activities to be jointly determined, our results show that the source of finance matters for exporting and investing in technology. Moreover, the importance of different types of finance varies across industries in the service sector. Overall, we find that internal funds and non-conventional sources of finance play an important role for exporting and investing in technology in both modern and traditional services. However, funding from conventional financial markets exerts divergent effects across service industries: while traditional service firms use resources from the banking sector to fund their technological investments, firms in the modern service sector rely more on funds raised through equity markets to support their exporting and technological efforts. These results contribute to the academic literature and policy debate on the importance of financial mechanisms to promote firms' strategic investment decisions. [ABSTRACT FROM AUTHOR]

Most privatization programs begin with a period of partial privatization in which only non-controlling shares of firms are sold on the stock market. Since management control is not transferred to private owners it is widely contended that partial privatization has little impact. This perspective ignores the role that the stock market can play in monitoring and rewarding managerial performance even when the government remains the controlling owner. Using data on Indian state-owned enterprises we find that partial privatization has a positive impact on profitability, productivity, and investment. [ABSTRACT FROM AUTHOR]

This article examines the empirical determinants of dividend payout policy for 947 sample firms listed on the Bombay Stock Exchange (BSE) in India from 1995 to 2013. The author identifies three distinct trends in the propensity to pay dividends between 1995 and 2013. The regression analysis suggests that most of the decline is due to the dividend payout policies of smaller, less profitable, younger firms and firms with comparatively more investment opportunities, high financial leverage, high business risk, and high dividend distribution tax. The author finds significant positive impact of catering incentives on the propensity to pay dividends, thus supporting catering theory of dividends. [ABSTRACT FROM PUBLISHER]

Corporate governance is an institutional arrangement that not only addresses the agency problem between shareholders and managers of the firm, but also provides the context for the decisions taken by the top management of the firm. In this context, the main question is whether ownership types influence corporate governance practices of firms. This research empirically studies corporate governance and disclosure practices of firms segregated according to types of ownership, i.e., foreign firms, private sector firms and public sector firms. Such firms are diverse entities with different management philosophy, responsibility and structure. This research focuses on firms across various sectors listed on Bombay Stock Exchange (BSE) and seeks to identify whether corporate governance and disclosure practices of foreign firms, private sector and public sector firms are significantly different. The research also emphasizes the salient features of firms according to ownership types. The findings shed light on the governance and disclosure practices of firms segregated according to ownership types in the legal and institutional environment of India. [ABSTRACT FROM AUTHOR]