Journal of Business Thought

Price Discovery and Market Efficiency in India's Financial Futures Market within the Derivatives Landscape: An Empirical Analysis

2023-12-11T15:37:13+0530

This study offers a robust, long-term analysis of price discovery and the persisting lead-lag relationship between India’s equity futures and spot markets. Utilising monthly data from April 2005 to December 2022, it filters transient noise typically associated with high-frequency data. Information Share and Common Factor Weight methodologies within the Vector Error Correction (VEC) framework consistently reveal the dominance of futures markets in the price discovery process. The insights remain consistent across three distinct periods spanning the global financial crisis and the COVID-19 pandemic. The volatility dynamics and asymmetry effects in the Indian equity futures and spot markets using the Vector Error Correction - Exponential General Autoregressive Conditional Heteroskedastic (VEC-EGARCH) approach uncover notable asymmetry effects, signifying a strong market sensitivity to negative news. This highlights the necessity for comprehensive risk management strategies and stringent regulatory supervision, especially in light of the significant growth and systemic risks in the Indian derivatives market.

Impact of Behavioural Biases on Investment Performance: A Comparative Analysis of Investors from India, USA and UK

2023-12-11T15:42:01+0530

This study presents evidence towards the existence of behavioural biases while analysing the impact of such biases on the investors’ investment performance in India, the USA, and the UK. Further, the study aims to investigate the moderating role of financial literacy on the relationship between behavioural biases and investment performance. It reveals that behavioural biases like affect heuristic, herding and status quo positively impact the investors’ investment performance amongst Indian investors whereas loss aversion, overconfidence, availability, and representativeness biases positively impact the investors’ investment performance amongst UK investors; and affect heuristic bias amongst USA investors. The findings divulge the negative impact of anchoring bias and mental accounting amongst Indian investors; availability bias, disposition effect, and overconfidence bias amongst USA investors; and affect heuristic and herding amongst UK investors. The study finds that a few of the behavioural biases impact investment performance positively, though less often. Hence investors should be cautious as these biases generally lead to irrational decision-making and might adversely influence the investors’ investment performance in the long run. The study further concludes that financial literacy significantly moderates the relationship between anchoring bias and individuals’ investment performance in India and affect heuristic in the USA. Interestingly, in the UK scenario, no significant moderating impact of financial literacy was found between any of the behavioral biases and investment performance.

Impact of Non-Performing Assets over Bootstrapped Efficiency of Banks: Analysis of Indian Domestic Banks

2023-12-11T16:13:09+0530

The present paper examines the possible impact of Non-Performing Assets (NPAs) on the efficiency estimates of banks. The bootstrapped efficiency scores of 44 domestic banks of India have been examined over a period of 12 years from 2010–11 to 2021–22. The results indicate that public-sector banks performed well in the efficiency aspect as compared to private-sector banks. The Wilcoxon signed-rank test discerned that there is a significant impact of NPAs over the efficiency estimates. The results divulge that non-consideration of NPAs leads to underestimation of the efficiency of banks. The results are expected to be fruitful for policymakers, regulators, banks, and researchers. The inference is very crucial for researchers as well as regulators while comparing the efficiency of public and private sector banks because public sector banks seriously suffer from the problem of mounting NPAs. The comparison of efficiency scores in different years unveils the strong relationship of efficiency estimates with money deposited into banks and the amount lent by banks. The outcomes of the study hold significant potential for policymakers, regulators, and banks alike, as they seek to get a comprehensive understanding of the intricate dynamics surrounding lending, deposits, and the overall efficiency of banking institutions. Further, since the impact of not including NPAs was found to be worse on managerial efficiency, the managers have to make rational use of banking inputs in order to maximise outputs. The study is likely to be a useful reference for researchers interested in researching various aspects of efficiency.

Gauging Effects of Hypothetical Extraction Method on Transport Linkages in India

2023-12-11T16:29:10+0530

Transport infrastructure is imperative for sectoral growth and economic progress. To gauge the impact of reduced contributions by the Railway and Other Transport sectors on other sectors in India, we use the Hypothetical Extraction (HE) based methodology to analyse the impact of such changes on outcomes of different sectors. Five Input-Output Transaction Tables (IOTT), between the years 1993-2014, are aggregated into 22 sectors. Methodologically, sector pair-wise correlations and sectoral groupings are identified in the transport sector. Induced elimination of Railway and Other Transport sector contributions are used to capture sectoral dependencies. Changing patterns in ‘Key’ sector compositions are further identified. Manufacturing, Mining and Quarrying, Construction, Storage and Warehousing and Electricity appear significantly correlated with Transport. Extraction causes sizeable output loss (around 60 perent) for the Manufacturing sector. ‘Self-extraction’ results in declining loss of output for transport sectors, whereas, Electricity and Storage and Warehousing remain ‘Key sectors’ in the post-extraction economy. An important implication emerging from our analysis is that dynamic relational dependencies across other sectors must be considered for future investments in transport infrastructure.

Evaluation of Sustainability Reporting Practices in Indian Banks – A Content Analysis Approach

2023-12-11T16:18:07+0530

In present times to achieve sustainable development, business organisations are required to disclose their socio-environmental contribution along with their financial results and to incorporate sustainability into their business practices. This paper with the help of content analysis seeks to analyse the sustainability disclosures of selected Indian banks listed on BSE for the year 2019-20. It further examines any significant difference in the sustainability disclosure of selected banks based on their sustainability disclosure according to the Global Reporting Initiatives (GRI) framework, foreign market presence and ownership pattern. As per the results of content analysis, the study finds that Sustainability Reporting (SR) is lowest for the ‘Environment’ dimension followed by ‘Human Rights and Labour Practices’ while reporting under the ‘Governance’ dimension is highest. The ‘Social’ dimension is also fairly reported by the sample banks. The results of Mann Whitney U test indicate that sustainability disclosure is significantly different among selected banks based on the adoption of the GRI framework for sustainability reporting and no difference in SR is found based on ownership pattern and foreign market presence.

Purpose, Semiotics and Rhetoric: A Study of Select Brands

2023-12-11T16:21:34+0530

With more competition than ever before, customer buying habits are changing, and a lot of brands are facing an identity crisis. Only by putting purpose at the centre of actions and taking into account the needs of customers, partners, and communities alike can brands create long-term value, make themselves stand out, and emotionally connect with consumers. This study reviews the literature on brand purpose, examines persuasive appeals in purpose-driven brand advertisements using Aristotle’s rhetorical triangle, and lastly blends semiotic theories with marketing to understand how these brands generate high-impact communications that emotionally engage consumers and affect their behaviour.

A Bibliometric Analysis of Research Trends to Study the Impact of Financial Development on the Environment

2023-12-11T16:34:17+0530

The present study is an attempt to dwell into the area of financial development and to understand its impact on the environment and sustainability. Using the meta-data of 628 research articles from the period of 2009-22, the analysis begins with a description of the sample dataset retrieved from the Scopus database. The research advances concerning the thematic and intellectual structure of different aspects of financial development and the environment are examined. Using the bibliometric methodology of scientific mapping, a cluster analysis based on bibliographic coupling of documents is undertaken. The results reveal four emerging themes. Using content analysis, the impact of Financial Development (FD) on ’Carbon Emissions,’ ’Environmental Quality,’ ’Energy Consumption’, and ’Environmental Degradation’ is presented in four subsections as clusters. The findings of this study are expected to provide valuable assistance to future scholars in their investigation of the phenomenon pertaining to these four specific sub-areas.

Impact of Ind-AS on IPO Underpricing in India

2023-12-11T16:25:34+0530

The present study analyses the collaborative endeavours associated with the evolving modifications in the procedures and regulations governing initial public offering (IPO) processes in India. Partly spurred by the mandated adoption of the Ind-AS (Indian Accounting Standards), which are aligned with International Financial Reporting Standards (IFRS), the study employs a student’s t-test along with multivariate regression on 126 firms listed in India between April 2013 to March 2020 on both BSE and NSE to examine the impact of changes in accounting standards on IPO under-pricing in India. The study finds substantial evidence that transitioning from AS (erstwhile accounting standards based on Generally Accepted Accounting Principles-GAAP) to Ind-AS improved market efficiency and reduced under-pricing. The adoption of Ind-AS also demonstrates a significant impact on the investing community’s investing perception. Further, the study finds that the mean under-pricing was not affected for firms supported by venture capital and group affiliation. The study concludes that regulatory bodies should prioritise enhancing transparency in offer documents to mitigate information asymmetry. This study is a pioneering effort in examining the Indian stock market, serving as foundational research that may be used in future investigations.