Pub Date : 2021-10-19DOI: 10.1108/sajbs-09-2021-422
Jorge E. Fresneda, Rajesh Chandrashekaran
{"title":"Guest editorial","authors":"Jorge E. Fresneda, Rajesh Chandrashekaran","doi":"10.1108/sajbs-09-2021-422","DOIUrl":"https://doi.org/10.1108/sajbs-09-2021-422","url":null,"abstract":"","PeriodicalId":55618,"journal":{"name":"South Asian Journal of Business Studies","volume":" ","pages":""},"PeriodicalIF":2.4,"publicationDate":"2021-10-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"47347051","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 : 2021-10-06DOI: 10.1108/sajbs-02-2021-0074
Shailesh Rastogi, A. Doifode, Jagjeevan Kanoujiya, S. Singh
PurposeCrude oil, gold and interest rates are some of the key indicators of the health of domestic as well as global economy. The purpose of the study is to find the shock volatility and price volatility effects of gold and crude oil market on interest rates in India.Design/methodology/approachThis study finds the mutual and directional association of the volatility of gold, crude oil and interest rates in India. The bi-variate GARCH models (Diagonal VEC GARCH and BEKK GARCH) are applied on the sample data of gold price, crude oil price and yield (interest rate) gathered from November 30, 2015 to November 16, 2020 (weekly basis) to investigate the volatility association including the volatility spillover effect in the three markets.FindingsThe main findings of the study focus on having a long-term conditional correlation between gold and interest rates, but there is no evidence of volatility spillover from gold and crude oil on the interest rates. The findings of the study are of great importance especially to the policymakers, as they state that the fluctuations in prices of gold and crude oil do not adversely impact the interest rates in India. Therefore, the fluctuations in prices of gold and crude may generally impact the economy, but it has nothing to do with interest rate in particular. This implies that domestic and foreign investments in the country will not be affected by gold and crude oil that are largely driven by interest rates in the country.Practical implicationsGold and crude oil are two very important commodities that have their importance not only for domestic affairs but also for international business. They veritably influence the economy including forex exchange for any nation. In addition to this, the researchers believe the findings will provide insights to policymakers, stakeholders and investors.Originality/valueGold and crude oil undoubtedly influence the exchange rates but their impact on the interest rates in an economy is not definite and remains ambiguous owing to the mixed findings of the studies. The lack of studies related to the impact of gold and crude oil on the interest rates, despite them being essentials for the health of any economy is the main motivation of this study. This study is novel as it investigates the volatility impact of crude oil and gold on interest rates and contributes to the existing literature with its findings.
{"title":"Volatility integration of gold and crude oil prices with the interest rates in India","authors":"Shailesh Rastogi, A. Doifode, Jagjeevan Kanoujiya, S. Singh","doi":"10.1108/sajbs-02-2021-0074","DOIUrl":"https://doi.org/10.1108/sajbs-02-2021-0074","url":null,"abstract":"PurposeCrude oil, gold and interest rates are some of the key indicators of the health of domestic as well as global economy. The purpose of the study is to find the shock volatility and price volatility effects of gold and crude oil market on interest rates in India.Design/methodology/approachThis study finds the mutual and directional association of the volatility of gold, crude oil and interest rates in India. The bi-variate GARCH models (Diagonal VEC GARCH and BEKK GARCH) are applied on the sample data of gold price, crude oil price and yield (interest rate) gathered from November 30, 2015 to November 16, 2020 (weekly basis) to investigate the volatility association including the volatility spillover effect in the three markets.FindingsThe main findings of the study focus on having a long-term conditional correlation between gold and interest rates, but there is no evidence of volatility spillover from gold and crude oil on the interest rates. The findings of the study are of great importance especially to the policymakers, as they state that the fluctuations in prices of gold and crude oil do not adversely impact the interest rates in India. Therefore, the fluctuations in prices of gold and crude may generally impact the economy, but it has nothing to do with interest rate in particular. This implies that domestic and foreign investments in the country will not be affected by gold and crude oil that are largely driven by interest rates in the country.Practical implicationsGold and crude oil are two very important commodities that have their importance not only for domestic affairs but also for international business. They veritably influence the economy including forex exchange for any nation. In addition to this, the researchers believe the findings will provide insights to policymakers, stakeholders and investors.Originality/valueGold and crude oil undoubtedly influence the exchange rates but their impact on the interest rates in an economy is not definite and remains ambiguous owing to the mixed findings of the studies. The lack of studies related to the impact of gold and crude oil on the interest rates, despite them being essentials for the health of any economy is the main motivation of this study. This study is novel as it investigates the volatility impact of crude oil and gold on interest rates and contributes to the existing literature with its findings.","PeriodicalId":55618,"journal":{"name":"South Asian Journal of Business Studies","volume":" ","pages":""},"PeriodicalIF":2.4,"publicationDate":"2021-10-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43751153","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 : 2021-09-23DOI: 10.1108/sajbs-01-2020-0012
K. R. Memon, Bilqees Ghani
PurposeThe purpose of this study is to investigate and articulate the performance appraisal process as a tool, used for the development of voice behavior through the fostering of trustworthiness and empowering culture in the organization.Design/methodology/approachData has been collected through survey instruments, filled by employees and their coworkers. The study proposes and tests a new model based on the relationship between performance appraisal and voice behavior through the moderation-mediation mechanism. Data analysis has been performed using SEM through SMART PLS 3.FindingsResults show that a strong and positive relationship exists between performance appraisal and voice behavior through the mediating variable of psychological empowerment. The moderators, empowering leadership and perceived fairness have played vital role in boosting psychological empowerment and strengthening the relationship with performance appraisal.Research limitations/implicationsThe study presents the performance appraisal system as one of the antecedents of employees' voice behavior generated through psychological empowerment (mediator) and perceived fairness and empowering leadership (moderators) since the appraisal system is to be implemented through the leader.Originality/valueThe study presents a unique and innovative idea while it tries to explore and measure the different effects/impacts of the relationship between performance appraisal and voice behavior.
{"title":"The relationship between performance appraisal system and employees' voice behavior through the mediation-moderation mechanism","authors":"K. R. Memon, Bilqees Ghani","doi":"10.1108/sajbs-01-2020-0012","DOIUrl":"https://doi.org/10.1108/sajbs-01-2020-0012","url":null,"abstract":"PurposeThe purpose of this study is to investigate and articulate the performance appraisal process as a tool, used for the development of voice behavior through the fostering of trustworthiness and empowering culture in the organization.Design/methodology/approachData has been collected through survey instruments, filled by employees and their coworkers. The study proposes and tests a new model based on the relationship between performance appraisal and voice behavior through the moderation-mediation mechanism. Data analysis has been performed using SEM through SMART PLS 3.FindingsResults show that a strong and positive relationship exists between performance appraisal and voice behavior through the mediating variable of psychological empowerment. The moderators, empowering leadership and perceived fairness have played vital role in boosting psychological empowerment and strengthening the relationship with performance appraisal.Research limitations/implicationsThe study presents the performance appraisal system as one of the antecedents of employees' voice behavior generated through psychological empowerment (mediator) and perceived fairness and empowering leadership (moderators) since the appraisal system is to be implemented through the leader.Originality/valueThe study presents a unique and innovative idea while it tries to explore and measure the different effects/impacts of the relationship between performance appraisal and voice behavior.","PeriodicalId":55618,"journal":{"name":"South Asian Journal of Business Studies","volume":" ","pages":""},"PeriodicalIF":2.4,"publicationDate":"2021-09-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"48939790","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 : 2021-09-16DOI: 10.1108/sajbs-08-2020-0270
Tapas Bantha, Umakanta Nayak
PurposeThis paper aims to examine the relationship between workplace spirituality and employee creativity and check the mediating role of psychological empowerment on this relationship.Design/methodology/approachAn online survey developed with SurveyMonkeyTM has been shared via LinkedIn to 750 software professionals working in Indian origin. For data analysis, partial least squares-structural equation modeling (PLS-SEM) has been used, and for testing the mediation among the variables, Preacher and Hayes (2008) method is used.FindingsThe PLS-SEM results have revealed a significant positive relationship between workplace spirituality and employee creativity. There is also a positive relationship between workplace spirituality and psychological empowerment. Preacher and Hayes (2008) mediation results have revealed that psychological empowerment partially mediates between workplace spirituality and employee creativity.Originality/valueThe present study has filled the gap, which has been not addressed till this date and may be considered to be first-of-its kind study, which directly tried to understand the association between workplace spirituality and employee creativity among employees of Indian origin.
{"title":"The relation of workplace spirituality with employee creativity among Indian software professionals: mediating role of psychological empowerment","authors":"Tapas Bantha, Umakanta Nayak","doi":"10.1108/sajbs-08-2020-0270","DOIUrl":"https://doi.org/10.1108/sajbs-08-2020-0270","url":null,"abstract":"PurposeThis paper aims to examine the relationship between workplace spirituality and employee creativity and check the mediating role of psychological empowerment on this relationship.Design/methodology/approachAn online survey developed with SurveyMonkeyTM has been shared via LinkedIn to 750 software professionals working in Indian origin. For data analysis, partial least squares-structural equation modeling (PLS-SEM) has been used, and for testing the mediation among the variables, Preacher and Hayes (2008) method is used.FindingsThe PLS-SEM results have revealed a significant positive relationship between workplace spirituality and employee creativity. There is also a positive relationship between workplace spirituality and psychological empowerment. Preacher and Hayes (2008) mediation results have revealed that psychological empowerment partially mediates between workplace spirituality and employee creativity.Originality/valueThe present study has filled the gap, which has been not addressed till this date and may be considered to be first-of-its kind study, which directly tried to understand the association between workplace spirituality and employee creativity among employees of Indian origin.","PeriodicalId":55618,"journal":{"name":"South Asian Journal of Business Studies","volume":" ","pages":""},"PeriodicalIF":2.4,"publicationDate":"2021-09-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"45798168","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 : 2021-08-31DOI: 10.1108/sajbs-10-2020-0372
Ammar Javed, Zia Khan
PurposeThis study investigates the mediating role of brand love in two important relationships: first, corporate social responsibility (CSR)–word-of-mouth (WoM) intentions and second, corporate ability (CA)–WoM relationships.Design/methodology/approachData were collected with a sample of 359 respondents, and partial least squares-based structural equation modeling was utilized for data analysis.FindingsThe research reveals interesting findings as brand love fully mediates the CSR–WoM relationship, whilst it partially mediates the CA–WoM relationship.Practical implicationsThe results demonstrate that cellular service firms should strive to create brand love. This is because CSR investments can be diligently translated into WoM intentions through brand love.Originality/valueThe proposal and validation of brand love as a mediator in CSR–WoM and CA–WoM relationships in the cellular service context of a South Asian market is the key contribution of this research.
{"title":"Fostering sustainable relationships in Pakistani cellular service industry through CSR and brand love","authors":"Ammar Javed, Zia Khan","doi":"10.1108/sajbs-10-2020-0372","DOIUrl":"https://doi.org/10.1108/sajbs-10-2020-0372","url":null,"abstract":"PurposeThis study investigates the mediating role of brand love in two important relationships: first, corporate social responsibility (CSR)–word-of-mouth (WoM) intentions and second, corporate ability (CA)–WoM relationships.Design/methodology/approachData were collected with a sample of 359 respondents, and partial least squares-based structural equation modeling was utilized for data analysis.FindingsThe research reveals interesting findings as brand love fully mediates the CSR–WoM relationship, whilst it partially mediates the CA–WoM relationship.Practical implicationsThe results demonstrate that cellular service firms should strive to create brand love. This is because CSR investments can be diligently translated into WoM intentions through brand love.Originality/valueThe proposal and validation of brand love as a mediator in CSR–WoM and CA–WoM relationships in the cellular service context of a South Asian market is the key contribution of this research.","PeriodicalId":55618,"journal":{"name":"South Asian Journal of Business Studies","volume":" ","pages":""},"PeriodicalIF":2.4,"publicationDate":"2021-08-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"43743956","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 : 2021-08-30DOI: 10.1108/sajbs-07-2020-0260
M. Parvin, R. Birner, A. Nahar
PurposeThe purpose of this study is to empirically estimate the impact of a government microcredit program on the handloom weavers to promote small and medium enterprises (SMEs) in Bangladesh.Design/methodology/approachThe data were collected from 311 handloom weavers from the Sirajganj District of Bangladesh from July to December 2015 using a multistage sampling technique. The analysis was conducted using a two-stage least squares regression model incorporating instrumental variables to control for the probable endogeneity problem associated with the study.FindingsThis study finds that government microcredit had no significant impact on borrowers' investment in their business, whereas credit received from multiple sources other than government credit had a significant negative impact. Additionally, literacy level, household assets and the number of operational handloom units positively affected investment, while the number of non-operational handloom units and distance negatively affected the investment.Research limitations/implicationsThis study's findings are more specific for the selected case and may not be generalizable to all kinds of SMEs.Practical implicationsThe policy implications are targeted at increasing loan size based on the number of operational handloom units to improve the performance of government and other microcredit programs to facilitate the growth of SMEs in Bangladesh.Originality/valueThis study specifically focuses on estimating the financial performance of government microcredit programs for SME development within the handloom industry, which has not been sufficiently explored in the literature.
{"title":"How well does government microcredit serve the investment needs of small and medium enterprises? An impact analysis on handloom weavers in Bangladesh","authors":"M. Parvin, R. Birner, A. Nahar","doi":"10.1108/sajbs-07-2020-0260","DOIUrl":"https://doi.org/10.1108/sajbs-07-2020-0260","url":null,"abstract":"PurposeThe purpose of this study is to empirically estimate the impact of a government microcredit program on the handloom weavers to promote small and medium enterprises (SMEs) in Bangladesh.Design/methodology/approachThe data were collected from 311 handloom weavers from the Sirajganj District of Bangladesh from July to December 2015 using a multistage sampling technique. The analysis was conducted using a two-stage least squares regression model incorporating instrumental variables to control for the probable endogeneity problem associated with the study.FindingsThis study finds that government microcredit had no significant impact on borrowers' investment in their business, whereas credit received from multiple sources other than government credit had a significant negative impact. Additionally, literacy level, household assets and the number of operational handloom units positively affected investment, while the number of non-operational handloom units and distance negatively affected the investment.Research limitations/implicationsThis study's findings are more specific for the selected case and may not be generalizable to all kinds of SMEs.Practical implicationsThe policy implications are targeted at increasing loan size based on the number of operational handloom units to improve the performance of government and other microcredit programs to facilitate the growth of SMEs in Bangladesh.Originality/valueThis study specifically focuses on estimating the financial performance of government microcredit programs for SME development within the handloom industry, which has not been sufficiently explored in the literature.","PeriodicalId":55618,"journal":{"name":"South Asian Journal of Business Studies","volume":" ","pages":""},"PeriodicalIF":2.4,"publicationDate":"2021-08-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42922041","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 : 2021-08-23DOI: 10.1108/sajbs-07-2020-0258
J. K, M. M. Sulphey
PurposeMental wellbeing brings in multiple benefits to employees and their organizations like better decision-making capacity, greater productivity, resilience and so on. The purpose of this paper is to examine the relationship of a few antecedents of mental wellbeing like workplace spirituality, mindfulness and self-compassion, using structural equation modeling (SEM).Design/methodology/approachUsing the convenience sampling method, data were collected from 333 employees of various organizations in India and SEM was performed using the R Program to test the hypotheses.FindingsResults suggest that mindfulness and self-compassion influenced the mental wellbeing of employees. It was also observed that workplace spirituality has a significant influence on both mindfulness and self-compassion.Originality/valueAn in-depth review of the literature revealed that no previous studies had examined the complex relationship between workplace spirituality, mindfulness, self-compassion and the mental wellbeing of employees. This research suggests that workplace spirituality, mindfulness and self-compassion are important factors that influence employees' mental wellbeing, and it empirically tests this in a developing country context. The present study enriches the literature studies on mental wellbeing, mindfulness, self-compassion and workplace spirituality by integrating “mindfulness to meaning theory”, “socio-emotional selectivity theory”, and “broaden and build theory”.
{"title":"Workplace spirituality, self-compassion and mindfulness as antecedents of employee mental wellbeing","authors":"J. K, M. M. Sulphey","doi":"10.1108/sajbs-07-2020-0258","DOIUrl":"https://doi.org/10.1108/sajbs-07-2020-0258","url":null,"abstract":"PurposeMental wellbeing brings in multiple benefits to employees and their organizations like better decision-making capacity, greater productivity, resilience and so on. The purpose of this paper is to examine the relationship of a few antecedents of mental wellbeing like workplace spirituality, mindfulness and self-compassion, using structural equation modeling (SEM).Design/methodology/approachUsing the convenience sampling method, data were collected from 333 employees of various organizations in India and SEM was performed using the R Program to test the hypotheses.FindingsResults suggest that mindfulness and self-compassion influenced the mental wellbeing of employees. It was also observed that workplace spirituality has a significant influence on both mindfulness and self-compassion.Originality/valueAn in-depth review of the literature revealed that no previous studies had examined the complex relationship between workplace spirituality, mindfulness, self-compassion and the mental wellbeing of employees. This research suggests that workplace spirituality, mindfulness and self-compassion are important factors that influence employees' mental wellbeing, and it empirically tests this in a developing country context. The present study enriches the literature studies on mental wellbeing, mindfulness, self-compassion and workplace spirituality by integrating “mindfulness to meaning theory”, “socio-emotional selectivity theory”, and “broaden and build theory”.","PeriodicalId":55618,"journal":{"name":"South Asian Journal of Business Studies","volume":" ","pages":""},"PeriodicalIF":2.4,"publicationDate":"2021-08-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"41915001","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 : 2021-06-30DOI: 10.1108/sajbs-07-2020-0241
Subash Chandra Pattnaik, Rashmita Sahoo
PurposeThis study examines how high-performance work practices (HPWPs) influence organizational citizenship behaviour (OCB) and the mediating role of employee affective commitment (AC) in this relationship in a non-Western context such as India.Design/methodology/approachThe study uses a survey research design. Taking a sample of 503 employees of a large manufacturing organization in India, the primary data are analysed using confirmatory factor analysis (CFA) and Andrew Hayes' PROCESS macro.FindingsThe findings indicate that employee perceptions of HPWPs positively relate to OCB. The mediating role of employee AC in the relationship is also found. These findings imply that positive perceptions of employees towards HPWPs create AC in employees and which, in turn, results in OCB.Research limitations/implicationsThe study focuses on a single organization, which limits its generalizability and recommends future researchers to conduct a broad-based study. The study is also limited by its research design and cross-sectional data for establishing causality on a firmer footing.Originality/valueThe study examines the influence of HPWPs on OCB with AC as a mediating variable in a non-Western setting such as India and makes a departure from the earlier ones in that it considers perceptions of employees towards HPWPs rather than managerial reporting of their actual use. Findings of the research take the debate a step further in understanding the mechanism of the relationship.
{"title":"Influence of high-performance work practices on organizational citizenship behaviour: the mediating role of affective commitment","authors":"Subash Chandra Pattnaik, Rashmita Sahoo","doi":"10.1108/sajbs-07-2020-0241","DOIUrl":"https://doi.org/10.1108/sajbs-07-2020-0241","url":null,"abstract":"PurposeThis study examines how high-performance work practices (HPWPs) influence organizational citizenship behaviour (OCB) and the mediating role of employee affective commitment (AC) in this relationship in a non-Western context such as India.Design/methodology/approachThe study uses a survey research design. Taking a sample of 503 employees of a large manufacturing organization in India, the primary data are analysed using confirmatory factor analysis (CFA) and Andrew Hayes' PROCESS macro.FindingsThe findings indicate that employee perceptions of HPWPs positively relate to OCB. The mediating role of employee AC in the relationship is also found. These findings imply that positive perceptions of employees towards HPWPs create AC in employees and which, in turn, results in OCB.Research limitations/implicationsThe study focuses on a single organization, which limits its generalizability and recommends future researchers to conduct a broad-based study. The study is also limited by its research design and cross-sectional data for establishing causality on a firmer footing.Originality/valueThe study examines the influence of HPWPs on OCB with AC as a mediating variable in a non-Western setting such as India and makes a departure from the earlier ones in that it considers perceptions of employees towards HPWPs rather than managerial reporting of their actual use. Findings of the research take the debate a step further in understanding the mechanism of the relationship.","PeriodicalId":55618,"journal":{"name":"South Asian Journal of Business Studies","volume":" ","pages":""},"PeriodicalIF":2.4,"publicationDate":"2021-06-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"42161405","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 : 2021-06-29DOI: 10.1108/sajbs-12-2020-0417
Asgar Ali, Manish Bansal
Purpose
The current study aims at examining the impact of upward and downward earnings management on the cross-sections of stock return. The study also examines the moderating role of cross-sectional effects on the association between earnings management and stock returns.
Design/methodology/approach
The study employed univariate and bivariate-sorted portfolio-level analysis to investigate the issue. Fama–Macbeth cross-sectional regression is used to analyze the moderating role of different cross-sectional effects. The study used a sample of 3085 Bombay Stock Exchange (BSE) listed stocks spanning over 20 years from January 2000 to December 2019.
Findings
The findings suggest that investors have different perceptions toward different forms of earnings management. In other words, results exhibit that investors perceive downward earnings management as an element of risk; hence, they discount the returns at a higher rate. On the contrary, results show that upward earnings management is positively perceived by the investors; hence, they hold the stocks even at a lower rate of return. This relation is found to be consistent even after controlling the impact of marker effect, size effect, value effect and momentum effect.
Originality/value
This study is among pioneering studies that consider the direction of earnings management while examining its impact on the stock return. This study is also among the earlier attempts to examine the moderating role of four different cross-sectional effects by taking a uniform sample of stocks over the same period.
{"title":"Impact of upward and downward earnings management on stock returns","authors":"Asgar Ali, Manish Bansal","doi":"10.1108/sajbs-12-2020-0417","DOIUrl":"https://doi.org/10.1108/sajbs-12-2020-0417","url":null,"abstract":"<h3>Purpose</h3>\u0000<p>The current study aims at examining the impact of upward and downward earnings management on the cross-sections of stock return. The study also examines the moderating role of cross-sectional effects on the association between earnings management and stock returns.</p><!--/ Abstract__block -->\u0000<h3>Design/methodology/approach</h3>\u0000<p>The study employed univariate and bivariate-sorted portfolio-level analysis to investigate the issue. Fama–Macbeth cross-sectional regression is used to analyze the moderating role of different cross-sectional effects. The study used a sample of 3085 Bombay Stock Exchange (BSE) listed stocks spanning over 20 years from January 2000 to December 2019.</p><!--/ Abstract__block -->\u0000<h3>Findings</h3>\u0000<p>The findings suggest that investors have different perceptions toward different forms of earnings management. In other words, results exhibit that investors perceive downward earnings management as an element of risk; hence, they discount the returns at a higher rate. On the contrary, results show that upward earnings management is positively perceived by the investors; hence, they hold the stocks even at a lower rate of return. This relation is found to be consistent even after controlling the impact of marker effect, size effect, value effect and momentum effect.</p><!--/ Abstract__block -->\u0000<h3>Originality/value</h3>\u0000<p>This study is among pioneering studies that consider the direction of earnings management while examining its impact on the stock return. This study is also among the earlier attempts to examine the moderating role of four different cross-sectional effects by taking a uniform sample of stocks over the same period.</p><!--/ Abstract__block -->","PeriodicalId":55618,"journal":{"name":"South Asian Journal of Business Studies","volume":"12 2","pages":""},"PeriodicalIF":2.4,"publicationDate":"2021-06-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"138509559","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 : 2021-06-29DOI: 10.1108/sajbs-10-2020-0379
Jahanzeb Marwat, S. Rajput, Sarfraz Ahmed Dakhan, Sonia Kumari, M. Ilyas
PurposeThe current study aims to achieve two targets. First, examine empirically that whether corporate managers use tax avoidance to influence short-term profitability? Second, investigate the impact of tax avoidance on the value of firms. The tax accounts provide the opportunity to influence temporary/permanent profitability but empirical studies overlooking this matter, particularly in emerging economies.Design/methodology/approachFirst, the authors identified unexpected fluctuations of tax avoidance and then examine whether it impacts the profitability signal and firms' value? The unbalanced panel data of 189 non-financial firms for the period 2000–2018 are used for empirical analysis. The estimation biases and results consistency are verified by using two different econometric models including generalized least square and two-stage least squareFindingsThe study identifies that managers manipulate the profitability signal through tax avoidance. Tax avoidance practices help in earning management and earning smoothing to avoid negative signals in the stock market. In line with the behavioral finance view, tax avoidance has a positive impact on current stock returns because investors focus on profitability without a detailed screening of cash flows.Originality/valueA limited number of studies investigate the use of tax avoidance for manipulation of the short-term earning signal. Identifying gaps and limitations in the literature, this study provides invaluable insights into tax avoidance and its association with the profitability and value of firms. The findings are important for investors, managers and policymakers in making portfolio decisions and corporate policies.
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