Pub Date : 2022-10-05DOI: 10.1108/jibr-04-2022-0090
Suvarna Hiremath, Ansumalini Panda, Prashantha C., S. Pasumarti
Purpose Food and grocery, which accounts for around 60% of the overall retail market in India, is the most promising area for launching a retail firm. The objective of this research paper is to conduct a thorough investigation of the impact of customers’ geographic, demographic and psychographic characteristics on the selection of retail store format choice behavior in the quickly growing Indian food and grocery retail industry, also to analyze the mediating role of store image on the store choice behavior. Design/methodology/approach A descriptive research design is used to collect data using the survey method and a structured questionnaire. The data collected from more than 400 food and grocery retail customers from neighborhood Kirana stores, supermarkets and hypermarkets in Karnataka, India, would be analyzed using both descriptive (mean and standard deviation) and Structural equation modeling (SEM) techniques. SEM techniques are used for validation of the model with independent constructs namely Demographics factors, Socio-Economic factors, Geographic factors, Lifestyle and Shopping Motives, a Mediating variable Store Image, and a dependent variable Store choice behavior. Partial least squares structural equation modeling (PLS-SEM) is used to examine the suggested theoretical framework. Findings The model is tested to reveal the impact of shoppers’ age, gender, occupation, education, monthly household income, family size, and distance traveled to the store, which all play a role in their retail format choice. Also, the socio economic and life style factors of shoppers influence their purchasing decisions as well; store image partially mediates between customer characteristics and store choice behavior. Implications The study has practical implications for food and grocery retailer in understanding customer behavior in the context of changing customer demographic and psychographic features in the Indian retailing sector. The findings aid retail merchants, allowing them to develop more successful retail marketing strategies and gain a competitive advantage. Originality This study could serve as a springboard for future research in this field. Retail marketers will benefit from the findings in terms of format creation and reorientation of marketing strategies in the shortest time.
{"title":"An empirical investigation of customer characteristics on retail format selection – a mediating role of store image","authors":"Suvarna Hiremath, Ansumalini Panda, Prashantha C., S. Pasumarti","doi":"10.1108/jibr-04-2022-0090","DOIUrl":"https://doi.org/10.1108/jibr-04-2022-0090","url":null,"abstract":"\u0000Purpose\u0000Food and grocery, which accounts for around 60% of the overall retail market in India, is the most promising area for launching a retail firm. The objective of this research paper is to conduct a thorough investigation of the impact of customers’ geographic, demographic and psychographic characteristics on the selection of retail store format choice behavior in the quickly growing Indian food and grocery retail industry, also to analyze the mediating role of store image on the store choice behavior.\u0000\u0000\u0000Design/methodology/approach\u0000A descriptive research design is used to collect data using the survey method and a structured questionnaire. The data collected from more than 400 food and grocery retail customers from neighborhood Kirana stores, supermarkets and hypermarkets in Karnataka, India, would be analyzed using both descriptive (mean and standard deviation) and Structural equation modeling (SEM) techniques. SEM techniques are used for validation of the model with independent constructs namely Demographics factors, Socio-Economic factors, Geographic factors, Lifestyle and Shopping Motives, a Mediating variable Store Image, and a dependent variable Store choice behavior. Partial least squares structural equation modeling (PLS-SEM) is used to examine the suggested theoretical framework.\u0000\u0000\u0000Findings\u0000The model is tested to reveal the impact of shoppers’ age, gender, occupation, education, monthly household income, family size, and distance traveled to the store, which all play a role in their retail format choice. Also, the socio economic and life style factors of shoppers influence their purchasing decisions as well; store image partially mediates between customer characteristics and store choice behavior.\u0000\u0000\u0000Implications\u0000The study has practical implications for food and grocery retailer in understanding customer behavior in the context of changing customer demographic and psychographic features in the Indian retailing sector. The findings aid retail merchants, allowing them to develop more successful retail marketing strategies and gain a competitive advantage.\u0000\u0000\u0000Originality\u0000This study could serve as a springboard for future research in this field. Retail marketers will benefit from the findings in terms of format creation and reorientation of marketing strategies in the shortest time.\u0000","PeriodicalId":45364,"journal":{"name":"Journal of Indian Business Research","volume":null,"pages":null},"PeriodicalIF":2.5,"publicationDate":"2022-10-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"62105862","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-09-30DOI: 10.1108/jibr-11-2021-0375
Saurabh Mittal, Moutusy Maity
Purpose This paper aims to explore the moderating impact of four moderators, namely, retailer brand strength, customer’s perceived purchase regularity, gender and purchase channel (online and offline) on the relationship between relationship marketing investments (RMIs) and customer gratitude, and customer gratitude and customer loyalty. The context of research is the purchase of a high-involvement product by Indian customers. Design/methodology/approach This study adapts Huang RMIs-Gratitude-Loyalty model and empirically validates the associated hypotheses using structural equation modeling. Data is collected through the survey method. Findings The study (N = 385) results suggest a significant impact of preferential treatment and interpersonal communication investments on customer’s feeling of gratitude toward the retailer and, consequently, on loyalty. Purchase channel, gender and, to a lesser extent, customer perceived regularity each moderates the relationships between marketing investment and gratitude, and that between gratitude and loyalty; surprisingly, retailer brand is not a significant moderator. Research limitations/implications Future research can factor in the impact of loyalty program on the proposed relationships. Practical implications This research offers helpful guidelines for retailers, especially for those who currently have a multichannel presence and invest or plan to invest in relationship marketing to obtain benefits from customer loyalty. Originality/value This investigation explores not only the relevance of RMIs–gratitude–loyalty model in the Indian retail context but also the influence of moderating variables on the retailers’ efforts of gaining consumer loyalty.
{"title":"Is relationship marketing investments–customer gratitude–customer loyalty linkage influenced by contextual and individual moderators? An emerging economy perspective","authors":"Saurabh Mittal, Moutusy Maity","doi":"10.1108/jibr-11-2021-0375","DOIUrl":"https://doi.org/10.1108/jibr-11-2021-0375","url":null,"abstract":"\u0000Purpose\u0000This paper aims to explore the moderating impact of four moderators, namely, retailer brand strength, customer’s perceived purchase regularity, gender and purchase channel (online and offline) on the relationship between relationship marketing investments (RMIs) and customer gratitude, and customer gratitude and customer loyalty. The context of research is the purchase of a high-involvement product by Indian customers.\u0000\u0000\u0000Design/methodology/approach\u0000This study adapts Huang RMIs-Gratitude-Loyalty model and empirically validates the associated hypotheses using structural equation modeling. Data is collected through the survey method.\u0000\u0000\u0000Findings\u0000The study (N = 385) results suggest a significant impact of preferential treatment and interpersonal communication investments on customer’s feeling of gratitude toward the retailer and, consequently, on loyalty. Purchase channel, gender and, to a lesser extent, customer perceived regularity each moderates the relationships between marketing investment and gratitude, and that between gratitude and loyalty; surprisingly, retailer brand is not a significant moderator.\u0000\u0000\u0000Research limitations/implications\u0000Future research can factor in the impact of loyalty program on the proposed relationships.\u0000\u0000\u0000Practical implications\u0000This research offers helpful guidelines for retailers, especially for those who currently have a multichannel presence and invest or plan to invest in relationship marketing to obtain benefits from customer loyalty.\u0000\u0000\u0000Originality/value\u0000This investigation explores not only the relevance of RMIs–gratitude–loyalty model in the Indian retail context but also the influence of moderating variables on the retailers’ efforts of gaining consumer loyalty.\u0000","PeriodicalId":45364,"journal":{"name":"Journal of Indian Business Research","volume":null,"pages":null},"PeriodicalIF":2.5,"publicationDate":"2022-09-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43509229","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-09-27DOI: 10.1108/jibr-10-2021-0357
Deepak Chawla, Shikha Bhatia, Sonali Singh
Purpose Parents are the first and leading socialization agents for young adults. It is vital to recognize the influence of perceived parental financial behaviour in shaping the financial literacy and investment behaviour of their children. In this context, this paper aims to test the perceived parental influence on financial literacy. Additionally, the direct and indirect influence of financial literacy on investment behaviour of young adults is examined. Design/methodology/approach This paper uses survey-based cross-sectional data. The partial least squares-structure equation model has been used to estimate and test the hypothesized relationships. Findings Perceived parental financial behaviour has been found to significantly impact the level of financial literacy. In turn, financial literacy positively influences the investment behaviour of young adults. Moreover, the young adults’ perception of confidence over ability to take right financial decisions drives their decision to invest. Social implications The results of this study imply that there is a need to have planned interventions from policymakers to ensure that young adults are financially literate. This may require introduction of planned programmes or workshops at middle or senior school levels. These programmes should help young adults understand the need for focused and long-term investing in the absence of social benefits. Originality/value This study is one of the preliminary works to examine the perceived parental influence on young adults’ financial literacy and further linking these with actual investment behaviour.
{"title":"Parental influence, financial literacy and investment behaviour of young adults","authors":"Deepak Chawla, Shikha Bhatia, Sonali Singh","doi":"10.1108/jibr-10-2021-0357","DOIUrl":"https://doi.org/10.1108/jibr-10-2021-0357","url":null,"abstract":"\u0000Purpose\u0000Parents are the first and leading socialization agents for young adults. It is vital to recognize the influence of perceived parental financial behaviour in shaping the financial literacy and investment behaviour of their children. In this context, this paper aims to test the perceived parental influence on financial literacy. Additionally, the direct and indirect influence of financial literacy on investment behaviour of young adults is examined.\u0000\u0000\u0000Design/methodology/approach\u0000This paper uses survey-based cross-sectional data. The partial least squares-structure equation model has been used to estimate and test the hypothesized relationships.\u0000\u0000\u0000Findings\u0000Perceived parental financial behaviour has been found to significantly impact the level of financial literacy. In turn, financial literacy positively influences the investment behaviour of young adults. Moreover, the young adults’ perception of confidence over ability to take right financial decisions drives their decision to invest.\u0000\u0000\u0000Social implications\u0000The results of this study imply that there is a need to have planned interventions from policymakers to ensure that young adults are financially literate. This may require introduction of planned programmes or workshops at middle or senior school levels. These programmes should help young adults understand the need for focused and long-term investing in the absence of social benefits.\u0000\u0000\u0000Originality/value\u0000This study is one of the preliminary works to examine the perceived parental influence on young adults’ financial literacy and further linking these with actual investment behaviour.\u0000","PeriodicalId":45364,"journal":{"name":"Journal of Indian Business Research","volume":null,"pages":null},"PeriodicalIF":2.5,"publicationDate":"2022-09-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48043308","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-09-20DOI: 10.1108/jibr-02-2022-0030
Kuldeep Singh, Shailesh Rastogi
Purpose The public listing of small and medium enterprises (SMEs) is a recent phenomenon in India, started in 2012. Such a paradigm shift for SMEs has altered the ownership structure of these firms. In addition, the listing has provided a notable status to SMEs, leading to a shift in exposure to market competition. Literature signifies that these changing dynamics are likely to impact the firm value. This study aims to examine the effects of promoters’ ownership and market competition on the firm value of listed SMEs in India. Ownership concentration (promoters’ ownership) is investigated as the primary proxy for internal governance mechanism, while market competition is investigated as an external form of firm regulation. Design/methodology/approach Three years of panel data from 2018 to 2020 of 80 listed Indian SMEs are used to conduct the analysis. The fixed effects model and cluster robust standard errors captured the detected fixed effects while adjusting for heteroskedasticity and autocorrelation. Besides, moderation analysis is conducted to test if competition regulates the relation between promoters’ ownership and firm value. Findings Promoters’ ownership does not impact the firm value significantly. However, market competition is significant and negatively drives the firm’s value. So, the market competition provides external regulation and coerces the firms to behave well to conserve the firm value. Finally, competition does not regulate the relationship between ownership effects and firm value. Therefore, the study contrasts the belief that the benefits of internal governance (especially promoters’ ownership) for firms in competitive economies are subject to market competition. Originality/value The study establishes the possibility of an integrated approach where internal and external governance mechanisms coexist to drive the firm value and endorses the same. The study is relevant to shareholders, practitioners, lawmakers and academics.
{"title":"Impact of promoters’ ownership and competition on firm’s value: a study of listed SMEs","authors":"Kuldeep Singh, Shailesh Rastogi","doi":"10.1108/jibr-02-2022-0030","DOIUrl":"https://doi.org/10.1108/jibr-02-2022-0030","url":null,"abstract":"\u0000Purpose\u0000The public listing of small and medium enterprises (SMEs) is a recent phenomenon in India, started in 2012. Such a paradigm shift for SMEs has altered the ownership structure of these firms. In addition, the listing has provided a notable status to SMEs, leading to a shift in exposure to market competition. Literature signifies that these changing dynamics are likely to impact the firm value. This study aims to examine the effects of promoters’ ownership and market competition on the firm value of listed SMEs in India. Ownership concentration (promoters’ ownership) is investigated as the primary proxy for internal governance mechanism, while market competition is investigated as an external form of firm regulation.\u0000\u0000\u0000Design/methodology/approach\u0000Three years of panel data from 2018 to 2020 of 80 listed Indian SMEs are used to conduct the analysis. The fixed effects model and cluster robust standard errors captured the detected fixed effects while adjusting for heteroskedasticity and autocorrelation. Besides, moderation analysis is conducted to test if competition regulates the relation between promoters’ ownership and firm value.\u0000\u0000\u0000Findings\u0000Promoters’ ownership does not impact the firm value significantly. However, market competition is significant and negatively drives the firm’s value. So, the market competition provides external regulation and coerces the firms to behave well to conserve the firm value. Finally, competition does not regulate the relationship between ownership effects and firm value. Therefore, the study contrasts the belief that the benefits of internal governance (especially promoters’ ownership) for firms in competitive economies are subject to market competition.\u0000\u0000\u0000Originality/value\u0000The study establishes the possibility of an integrated approach where internal and external governance mechanisms coexist to drive the firm value and endorses the same. The study is relevant to shareholders, practitioners, lawmakers and academics.\u0000","PeriodicalId":45364,"journal":{"name":"Journal of Indian Business Research","volume":null,"pages":null},"PeriodicalIF":2.5,"publicationDate":"2022-09-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43276147","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-07-14DOI: 10.1108/jibr-11-2020-0348
C. Chatterjee, Sweta Tiwari
Purpose This paper aims to analyze the stock price reaction because of dividend reduction (DR) announcements in the Indian equity market, controlling for share repurchases. Design/methodology/approach The sample comprises National Stock Exchange (NSE) 500 companies listed in the NSE Ltd. covering a time span from year 2009 to 2019. Using the event study methodology, the authors measure the impact of DR announcements on security prices around the event day. The authors also examine the price response to DRs at the interim stage versus the final stage and identify the factors that drive the decision to reduce dividends at the interim level versus final level. Findings The authors find that overall DR announcements negatively impact abnormal returns. Firms that experience stronger adverse price reaction following DR announcements resort to share repurchase in the same year to boost stock prices. The authors find that interim DRs create more negative price reactions than final DRs. Finally, firms experiencing lower levels of prior year earnings, firms with smaller sizes and overvalued firms tend to reduce dividends at the interim level instead of postponing the reduction to the final level. Originality/value This paper examines stock price reaction because of DR announcements of Indian firms. The sample comprises firms that reduce dividends with contemporaneous share repurchases as well as firms that reduce dividends without contemporaneous repurchase activity. To the best of the authors’ knowledge, studies on substitution effect of dividends with buyback in the context of Indian equity market are rare. Further, investigating the difference in stock price movement because of DRs at the interim level versus the final level is the unique contribution of this paper.
{"title":"Dividend reduction and stock price reaction in Indian market: is there a role of share repurchase?","authors":"C. Chatterjee, Sweta Tiwari","doi":"10.1108/jibr-11-2020-0348","DOIUrl":"https://doi.org/10.1108/jibr-11-2020-0348","url":null,"abstract":"\u0000Purpose\u0000This paper aims to analyze the stock price reaction because of dividend reduction (DR) announcements in the Indian equity market, controlling for share repurchases.\u0000\u0000\u0000Design/methodology/approach\u0000The sample comprises National Stock Exchange (NSE) 500 companies listed in the NSE Ltd. covering a time span from year 2009 to 2019. Using the event study methodology, the authors measure the impact of DR announcements on security prices around the event day. The authors also examine the price response to DRs at the interim stage versus the final stage and identify the factors that drive the decision to reduce dividends at the interim level versus final level.\u0000\u0000\u0000Findings\u0000The authors find that overall DR announcements negatively impact abnormal returns. Firms that experience stronger adverse price reaction following DR announcements resort to share repurchase in the same year to boost stock prices. The authors find that interim DRs create more negative price reactions than final DRs. Finally, firms experiencing lower levels of prior year earnings, firms with smaller sizes and overvalued firms tend to reduce dividends at the interim level instead of postponing the reduction to the final level.\u0000\u0000\u0000Originality/value\u0000This paper examines stock price reaction because of DR announcements of Indian firms. The sample comprises firms that reduce dividends with contemporaneous share repurchases as well as firms that reduce dividends without contemporaneous repurchase activity. To the best of the authors’ knowledge, studies on substitution effect of dividends with buyback in the context of Indian equity market are rare. Further, investigating the difference in stock price movement because of DRs at the interim level versus the final level is the unique contribution of this paper.\u0000","PeriodicalId":45364,"journal":{"name":"Journal of Indian Business Research","volume":null,"pages":null},"PeriodicalIF":2.5,"publicationDate":"2022-07-14","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45322090","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-07-11DOI: 10.1108/jibr-10-2021-0352
Parijat Lanke, Abhishek Totawar, J. Raghuraman, P. Saravanan
Purpose Mergers and acquisitions (M&As) are common in today's corporate world, yet nearly half of them fail. Among such failed M&As, hostile takeovers cover a large proportion. The purpose of this paper is to understand the puzzling evidence of a successful hostile takeover amid multiple red flags, including cultural clash. Towards that end, this study explores the case of a recent successful takeover of Mindtree Ltd. by Larsen and Toubro Ltd. and proposes the role of sensemaking and sensegiving and their interaction within the framework of context, employees and leadership. Design/methodology/approach This paper uses a secondary data-based case methodology to develop arguments and frameworks. The case study is built on multiple data sources, including newspaper articles, published reports, company data and company reports. This paper also uses public interviews given by the company heads during the process of the takeover. This paper also uses the Corley and Gioia method of qualitative data analysis using thematic coding. Findings This paper reports a framework based on a real-world case study. This paper explains that a successful alignment of sensemaking and sensegiving between the acquired firm's employees and new leadership could be an ingredient in managing a hostile takeover. The analysis also revealed eight aggregate dimensions of the data structure based on thematic coding analysis. Research limitations/implications The proposed model can be further tested using empirical methods. This paper is limited in its access and analysis of only secondary data. Practical implications This paper provides novel implications in terms of sensemaking and sensegiving interaction for managers and executives. Originality/value This paper is the first to bring the role of sensemaking and sensegiving into the context of hostile takeovers. This paper would provide a new impetus from an interpretive perspective to research hostile takeovers and give novel insights for managers and executives.
{"title":"Hostile takeovers, culture, and firm performance: a sensemaking and sensegiving perspective","authors":"Parijat Lanke, Abhishek Totawar, J. Raghuraman, P. Saravanan","doi":"10.1108/jibr-10-2021-0352","DOIUrl":"https://doi.org/10.1108/jibr-10-2021-0352","url":null,"abstract":"\u0000Purpose\u0000Mergers and acquisitions (M&As) are common in today's corporate world, yet nearly half of them fail. Among such failed M&As, hostile takeovers cover a large proportion. The purpose of this paper is to understand the puzzling evidence of a successful hostile takeover amid multiple red flags, including cultural clash. Towards that end, this study explores the case of a recent successful takeover of Mindtree Ltd. by Larsen and Toubro Ltd. and proposes the role of sensemaking and sensegiving and their interaction within the framework of context, employees and leadership.\u0000\u0000\u0000Design/methodology/approach\u0000This paper uses a secondary data-based case methodology to develop arguments and frameworks. The case study is built on multiple data sources, including newspaper articles, published reports, company data and company reports. This paper also uses public interviews given by the company heads during the process of the takeover. This paper also uses the Corley and Gioia method of qualitative data analysis using thematic coding.\u0000\u0000\u0000Findings\u0000This paper reports a framework based on a real-world case study. This paper explains that a successful alignment of sensemaking and sensegiving between the acquired firm's employees and new leadership could be an ingredient in managing a hostile takeover. The analysis also revealed eight aggregate dimensions of the data structure based on thematic coding analysis.\u0000\u0000\u0000Research limitations/implications\u0000The proposed model can be further tested using empirical methods. This paper is limited in its access and analysis of only secondary data.\u0000\u0000\u0000Practical implications\u0000This paper provides novel implications in terms of sensemaking and sensegiving interaction for managers and executives.\u0000\u0000\u0000Originality/value\u0000This paper is the first to bring the role of sensemaking and sensegiving into the context of hostile takeovers. This paper would provide a new impetus from an interpretive perspective to research hostile takeovers and give novel insights for managers and executives.\u0000","PeriodicalId":45364,"journal":{"name":"Journal of Indian Business Research","volume":null,"pages":null},"PeriodicalIF":2.5,"publicationDate":"2022-07-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"49058005","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-05-20DOI: 10.1108/jibr-10-2020-0344
Aparna Bhat
Purpose This paper aims to propose the implied volatility index for the US dollar–Indian rupee pair (INRVIX). The study seeks to examine whether INRVIX truly reflects future USDINR (US Dollar-Indian rupee) volatility and signals profitable currency trading strategies. Design/methodology/approach Two measures of INRVIX are constructed and compared: a model-free version based on the methodology adopted by the Chicago Board of Options Exchange (CBOE) and a model-dependent version constructed from Black–Scholes–Merton-implied volatility. The proposed INRVIX is computed by tweaking some parameters of the CBOE methodology to ensure compatibility with the microstructure of the Indian currency derivatives market. The volatility forecasting ability of INRVIX is compared to that of a generalized autoregressive conditional heteroscedasticity (1,1) model. Ordinary least squares regression is used to examine the relationship between n-day-ahead USDINR returns and different quantiles of INRVIX. Findings Results indicate that INRVIX based on the model-free approach reflects ex post volatility in a better manner than its model-dependent counterpart, although neither measure is found to be an unbiased and efficient forecast. Subsample analysis across tranquil and turbulent periods corroborates the results. The volatility forecasting performance of INRVIX is found to be better than that of forecasts based on historical time-series. These results are consistent with similar studies of developed market currencies. The study does not find any significant relationship between extreme levels of INRVIX and the profitability of trading strategies based on such levels, which is contrary to results from the equity options market. Practical implications Foreign exchange volatility affects the costs of international trade and the external sector competitiveness of Indian multinationals. It is a significant risk factor for financial institutions and traders in the financial markets. An implied VIX for the USDINR could serve as an indicator of expected foreign exchange risk. It could thus provide a signal for a possible intervention in the forex market by the regulator. Regulators could introduce volatility derivative contracts based on the INRVIX. Such contracts would enable hedging of the pure volatility risk of dollar–rupee exposure. Thus, the study has practical implications for investors, hedgers, regulators and academicians alike. Originality/value To the author’s knowledge, this is one of a few studies to construct an implied VIX for an emerging currency like the rupee. The study is based on up-to-date sample data that includes the recent COVID-19 market crash. A novel contribution of this paper is that in addition to examining whether INRVIX contains information about future USDINR volatility, and it also examines the signalling power of INRVIX for currency trading strategies.
{"title":"Construction of a volatility index from exchange-traded dollar–rupee options","authors":"Aparna Bhat","doi":"10.1108/jibr-10-2020-0344","DOIUrl":"https://doi.org/10.1108/jibr-10-2020-0344","url":null,"abstract":"\u0000Purpose\u0000This paper aims to propose the implied volatility index for the US dollar–Indian rupee pair (INRVIX). The study seeks to examine whether INRVIX truly reflects future USDINR (US Dollar-Indian rupee) volatility and signals profitable currency trading strategies.\u0000\u0000\u0000Design/methodology/approach\u0000Two measures of INRVIX are constructed and compared: a model-free version based on the methodology adopted by the Chicago Board of Options Exchange (CBOE) and a model-dependent version constructed from Black–Scholes–Merton-implied volatility. The proposed INRVIX is computed by tweaking some parameters of the CBOE methodology to ensure compatibility with the microstructure of the Indian currency derivatives market. The volatility forecasting ability of INRVIX is compared to that of a generalized autoregressive conditional heteroscedasticity (1,1) model. Ordinary least squares regression is used to examine the relationship between n-day-ahead USDINR returns and different quantiles of INRVIX.\u0000\u0000\u0000Findings\u0000Results indicate that INRVIX based on the model-free approach reflects ex post volatility in a better manner than its model-dependent counterpart, although neither measure is found to be an unbiased and efficient forecast. Subsample analysis across tranquil and turbulent periods corroborates the results. The volatility forecasting performance of INRVIX is found to be better than that of forecasts based on historical time-series. These results are consistent with similar studies of developed market currencies. The study does not find any significant relationship between extreme levels of INRVIX and the profitability of trading strategies based on such levels, which is contrary to results from the equity options market.\u0000\u0000\u0000Practical implications\u0000Foreign exchange volatility affects the costs of international trade and the external sector competitiveness of Indian multinationals. It is a significant risk factor for financial institutions and traders in the financial markets. An implied VIX for the USDINR could serve as an indicator of expected foreign exchange risk. It could thus provide a signal for a possible intervention in the forex market by the regulator. Regulators could introduce volatility derivative contracts based on the INRVIX. Such contracts would enable hedging of the pure volatility risk of dollar–rupee exposure. Thus, the study has practical implications for investors, hedgers, regulators and academicians alike.\u0000\u0000\u0000Originality/value\u0000To the author’s knowledge, this is one of a few studies to construct an implied VIX for an emerging currency like the rupee. The study is based on up-to-date sample data that includes the recent COVID-19 market crash. A novel contribution of this paper is that in addition to examining whether INRVIX contains information about future USDINR volatility, and it also examines the signalling power of INRVIX for currency trading strategies.\u0000","PeriodicalId":45364,"journal":{"name":"Journal of Indian Business Research","volume":null,"pages":null},"PeriodicalIF":2.5,"publicationDate":"2022-05-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"49212224","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-05-19DOI: 10.1108/jibr-08-2021-0289
Rupjyoti Saha, S. G. Maji
Purpose This study aims to examine the impact of board human capital diversity, measured by educational qualification diversity and gender diversity on the financial performance of Indian firms after controlling corporate governance (CG) and firm-specific variables. Design/methodology/approach This study is based on a panel data set of top 100 listed Indian firms for a period of five years. The authors use Blau index and Shannon index to compute qualification diversity. The authors use three-stage least square (3SLS) model to deal with the potential endogeneity issue in the association of human capital diversity variables and other CG variables with firm performance. Further, the authors adopt generalized estimating equation (GEE) model for robustness check. Findings The authors find a significant positive impact of board’s educational diversity as well as gender diversity on the financial performance of firms. Additionally, they extricate highly significant positive interaction impact of board’s educational diversity and gender diversity on the financial performance of firms. Further, the results indicate a significant positive impact of board size, board independence, ownership concentration, family ownership and audit committee independence on firm performance, while CEO duality exhibits a significant negative impact on firm performance. Originality/value This study fills the existing gap in literature by extending the performance implications of board’s human capital diversity for top listed Indian firms.
{"title":"Board human capital diversity and firm performance: evidence from top listed Indian firms","authors":"Rupjyoti Saha, S. G. Maji","doi":"10.1108/jibr-08-2021-0289","DOIUrl":"https://doi.org/10.1108/jibr-08-2021-0289","url":null,"abstract":"\u0000Purpose\u0000This study aims to examine the impact of board human capital diversity, measured by educational qualification diversity and gender diversity on the financial performance of Indian firms after controlling corporate governance (CG) and firm-specific variables.\u0000\u0000\u0000Design/methodology/approach\u0000This study is based on a panel data set of top 100 listed Indian firms for a period of five years. The authors use Blau index and Shannon index to compute qualification diversity. The authors use three-stage least square (3SLS) model to deal with the potential endogeneity issue in the association of human capital diversity variables and other CG variables with firm performance. Further, the authors adopt generalized estimating equation (GEE) model for robustness check.\u0000\u0000\u0000Findings\u0000The authors find a significant positive impact of board’s educational diversity as well as gender diversity on the financial performance of firms. Additionally, they extricate highly significant positive interaction impact of board’s educational diversity and gender diversity on the financial performance of firms. Further, the results indicate a significant positive impact of board size, board independence, ownership concentration, family ownership and audit committee independence on firm performance, while CEO duality exhibits a significant negative impact on firm performance.\u0000\u0000\u0000Originality/value\u0000This study fills the existing gap in literature by extending the performance implications of board’s human capital diversity for top listed Indian firms.\u0000","PeriodicalId":45364,"journal":{"name":"Journal of Indian Business Research","volume":null,"pages":null},"PeriodicalIF":2.5,"publicationDate":"2022-05-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"41286311","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-05-17DOI: 10.1108/jibr-06-2022-383
N. Srinivasan, Shalini Singh
{"title":"Guest editorial: Digital marketing trends","authors":"N. Srinivasan, Shalini Singh","doi":"10.1108/jibr-06-2022-383","DOIUrl":"https://doi.org/10.1108/jibr-06-2022-383","url":null,"abstract":"","PeriodicalId":45364,"journal":{"name":"Journal of Indian Business Research","volume":null,"pages":null},"PeriodicalIF":2.5,"publicationDate":"2022-05-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42798471","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2022-04-19DOI: 10.1108/jibr-12-2020-0382
Kumar Sanjay Sawarni, Sivasankaran Narayanasamy, S. Chattopadhyay, Prasenjit Chakrabarti
Purpose This paper aims to investigate how firms growing at a high average rate over a period differ in their working capital management (WCM) efficiency from those growing at a low rate during the same period. It also examines how WCM efficiency impacts firms’ financial performance and how firms’ growth influences this relationship. Design/methodology/approach The authors have analyzed the difference in WCM efficiency of a sample of 431 nonfinancial firms during 2012 to 2019 by segregating them into above median growth (AMG) and below median growth (BMG) firms. The authors have used fixed effect regression to investigate the impact of cash conversion cycle, inventory days, accounts receivable days and accounts payable days on the financial performance and the effect of growth on this relationship. Findings This study finds that AMG firms manage their working capital significantly more efficiently than BMG firms. It also reports that the WCM efficiency impacts the profitability and valuation of firms positively; however, this relationship is more intense for firms growing at a high rate than for those growing at a low rate. Originality/value This research should contribute to the less researched area of WCM by finding the effect of growth on the relationship between WCM efficiency and performance. The evidence found in this study may be of interest for industry practitioners and managers in identifying WCM efficiency as an important driver for the financial performance of their firms.
{"title":"Working capital management, financial performance and growth of firms: empirical evidence from India","authors":"Kumar Sanjay Sawarni, Sivasankaran Narayanasamy, S. Chattopadhyay, Prasenjit Chakrabarti","doi":"10.1108/jibr-12-2020-0382","DOIUrl":"https://doi.org/10.1108/jibr-12-2020-0382","url":null,"abstract":"\u0000Purpose\u0000This paper aims to investigate how firms growing at a high average rate over a period differ in their working capital management (WCM) efficiency from those growing at a low rate during the same period. It also examines how WCM efficiency impacts firms’ financial performance and how firms’ growth influences this relationship.\u0000\u0000\u0000Design/methodology/approach\u0000The authors have analyzed the difference in WCM efficiency of a sample of 431 nonfinancial firms during 2012 to 2019 by segregating them into above median growth (AMG) and below median growth (BMG) firms. The authors have used fixed effect regression to investigate the impact of cash conversion cycle, inventory days, accounts receivable days and accounts payable days on the financial performance and the effect of growth on this relationship.\u0000\u0000\u0000Findings\u0000This study finds that AMG firms manage their working capital significantly more efficiently than BMG firms. It also reports that the WCM efficiency impacts the profitability and valuation of firms positively; however, this relationship is more intense for firms growing at a high rate than for those growing at a low rate.\u0000\u0000\u0000Originality/value\u0000This research should contribute to the less researched area of WCM by finding the effect of growth on the relationship between WCM efficiency and performance. The evidence found in this study may be of interest for industry practitioners and managers in identifying WCM efficiency as an important driver for the financial performance of their firms.\u0000","PeriodicalId":45364,"journal":{"name":"Journal of Indian Business Research","volume":null,"pages":null},"PeriodicalIF":2.5,"publicationDate":"2022-04-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"44734145","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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