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The article provides an overview of the impact of the Covid-19 pandemic on the Indian economy and financial markets. It explains that the lockdown implemented in March 2020 resulted in a halt of economic activities, leading to job losses and reduced economic activity. The global trade is expected to decrease significantly, and the IMF predicts a multi-layered crisis. The Indian economy suffered a significant loss during the lockdown, but the government introduced a stimulus package to alleviate the economic situation. The stock market also experienced a decline but has gradually started to recover. The article also discusses the measures taken by the government to revive the economy, such as cash transfers and easy credit for businesses. [Extracted from the article]

The study examines the relationship between debt financing and firm performance through the lens of agency costs during the Covid-19 period for standalone firms and firms affiliated with business groups. It does the same for firms engaged in manufacturing and services. Using 4,422 firm-year observations from nonfinancial firms from 2014 to 2020, the study finds that business group firms raised more new debt vis-à-vis standalone firms. On the other hand, service sector firms raised more debt than manufacturing firms. The findings suggest that agency costs declined during the Covid-19 shock, enabling firms to raise debt primarily to increase their liquidity during an uncertain period. Companies had a substantial amount of cash meant for investments in the future. Under these circumstances, corporate governance mechanisms should be strong to prevent the misallocation/misappropriation of funds, thus reducing future agency costs. [ABSTRACT FROM AUTHOR]

The paper evaluates the impact of Covid-19 pandemic on firm performance along with other corporate finance variables. As expected, Covid-19 had a negative impact on firm’s performance, especially on small firms with pronounced leverage. The paper also highlights that firms with higher cash holdings were resilient in the face of the pandemic. Manufacturing firms were the worst hit as their tasks could not be executed remotely; supply chain of raw materials was severely disrupted. Another sector that bore the brunt was travelling and hospitality, where tasks cannot be digitized. [ABSTRACT FROM AUTHOR]

The purpose of this study is to examine the effect of corporate governance mechanisms on bank performance in general and the effect of board-constituted committees on bank performance in particular. Primarily, two questions are addressed in the context of the banking sector of India. First, does corporate governance mechanisms reduce the quantum of non-performing assets (NPAs)? Second, does the internal committee affect bank performance? Hence, this paper determines whether independent directors strengthen corporate boards and whether committees affect bank performance. The panel data ordinary least square regression analysis is used for this study. We also use logistic regression models for various committees to find their relationship with bank performance and NPAs. Tobin's Q is used as proxy for bank performance. Independent variables are board size (BSIZE), proportion of independent directors on the board (PERIND), number of board meetings per year (BMEET), size of the audit committee (AUC), and two measures of the bank business (asset size and loan), and one control variable is time. We use financial and corporate governance data from 2005 to 2018, the study finds that independent directors play a major role on the board. It finds a positive and significant relationship between board independence and bank performance. The performance also increases with the increase in board size but after a point, the curve declines forming and an inverted U-shaped curve is formed. The mandatory internal committees have a crucial role to play, which is demonstrated by their effect on the reduction of NPAs. The significance of a well-functioning board and internal committees in discharging their fiduciary duties is highlighted in this study. An internal committee comprising a majority of independent directors is found to positively affect the performance of banks. They can help managers disburse good-quality loans and keep a check on risk-laden ventures. [ABSTRACT FROM AUTHOR]

The paper examines the relationship between Operating Cash Flow (OCF) volatility and debt usage in the capital structure of firms. Using the model used by Bates et al. (2009) and Frank and Goyal (2009) on a sample of 22,798 firm-years data points, we found that there is an inverse relationship between the debt component of capital structure and OCF. We also found a positive relationship between total debt (adjusted for total market value of the firm) and volatility of the OCF both in the full sample and the two highest quartiles. An increase of one standard deviation in OCF volatility causes a 5% increase in total debt in the capital structure. Hence, increase in OCF volatility of a firm leads to increased borrowing. The paper is probably the first to examine the relationship between OCF volatility and debt proportion of the capital structure in the Indian context. [ABSTRACT FROM AUTHOR]

This paper is a study of the effectiveness of different types of Related Party Transactions (RPTs) on firm performance in the Indian context. The corporate governance mechanism of India has changed evolutionarily after the implementation of Clause 49 the Listing Agreements. According to Clause 49, the Listing Agreements of RPTs are approved by the audit committee, a mechanism which is unique and different from other developed and emerging countries. Hence, this paper intends to investigate the impact and behavior of various RPTs on firm performance and whether the preapproval mechanism helps to mitigate the management's opportunistic behavior of transferring the resources from the company through RPTs or whether it has no impact. The paper empirically examines the effect of RPTs on firm performance for the period 2003-2016. It uses 9,140 firm-years for the empirical analysis and also uses firm and fixed effect as part of the research methodology. The study finds that there are positive as well as negative impact of different types of RPTs on firm performance. [ABSTRACT FROM AUTHOR]