Authors: Rastogi, S. ,Goel, A. ,Doifode, A.
Journal: Journal of Banking Regulation,
Publication date: 01 December 2023
Publisher: Palgrave Macmillan
URL: Access Paper

Abstract

Financial inclusion has done its best across the world to bring unbanked people to the mainstream of financial and banking services. However, the metamorphosis is slow and needs some shots in the arm. This paper attempts to explore ways to expedite the process of economic development of the poor through financial inclusion. A newer technology, Open API for banking (OAB), can support financial inclusion for economic development and the growth of the poor. There are two main reasons for the success of OAB. Many mobile-based applications use OAB. Therefore, OAB can easily piggyback on the success of mobile penetration. The meager cost and simple technology of OAB is another reason for its success, primarily when OAB is aimed at unbanked people of the world. Structured Equation Modelling is applied to successfully and empirically test the mediation role of OAB between financial inclusion and economic development of the poor. OAB is found to have complete mediation. This work is the only study that links OAB with financial inclusion and the economic development of the poor. OAB stands out among all the other digitalisation tools of financial services due to its exclusive features. OAB has considerable implications to expedite the execution of financial inclusion for the economic development of the poor. But, to extend its full impact on the economic development of the poor, OAB should be clubbed with financial inclusion as a policy. Otherwise, a good opportunity will remain confined mostly as an effective solution for digitalising payment services. The digital divide is supposed to be bridged by OAB. However, this paper has not addressed this issue empirically. Besides this, the synergetic effect of FI and OAB, which is strongly recommended in the study, needs empirical testing. Both the limitation of the study is the future scope of the topic. No other study was observed on the topic, where OAB is suggested to bridge the gap between financial inclusion and economic development of the poor. The study has immense potential to change the course of action of the policy on Financial Inclusion. Using the findings of the study, the policymakers can embark upon using the new innovative technology in a more concerted way for the social upheaval of the poor in India. © 2022, The Author(s), under exclusive licence to Springer Nature Limited.

Authors: Rastogi, S. ,Kanoujiya, J.
Journal: International Journal of Productivity and Performance Management,
Publication date: 10 November 2023
Publisher: Emerald Publishing
URL: Access Paper

Abstract

The purpose of the study is to explore the association of disclosures for the performance of banks in India. Design/methodology/approach: Panel data analysis (utilising static and dynamic models) is applied on the data of 34 Indian banks (for time-frame 2015–2019) to explore the association of disclosures (as transparency and disclosure index) with the performance of banks (as profitability, risk-taking and technical efficiency (TE)). The regulation, competition and ownership concentration variables are taken as control variables. Findings: None of the banks’ performance measures applied in the study is significantly associated with the disclosures. This situation implies that disclosures do not impact the performance of the banks in India. The reason is that disclosures and performance are two different activities that aim at different purposes. Research limitations/implications: This study does not provide output for the association between disclosures and the value of the banks and confines itself to explore the association between disclosures and performance of the banks only. This limitation can be the future scope of the study. Originality/value: There is no other study that solely focuses on exploring the association of disclosures with the performance of the banks. Disclosure has more significant importance in banks because of the inherent nature of opaqueness in banking operations. Therefore, the current study’s findings have substantial implications for policymakers, managers and investors of the banks.

Authors: Rastogi, S. ,Singh, K.
Journal: Social Responsibility Journal
Publication date: 22 May 2023
Publisher: Emerald Publishing
URL: Access Paper

Abstract

Nowadays, informed decision-making is catching up. Technological advancements and computing ability further fuel and facilitate this tilt toward informed decision-making. In such a scenario, data is cynosure. Therefore, the ability to gather data by a nation (incredibly accurate public data) becomes equally important and relevant, as measured by statistical performance indicators (SPI). This study aims to explore the association of financial inclusion (FI); environmental, social and governance (ESG); poverty; and SPI. Design/methodology/approach: The panel data of 140 nations for nine years are gathered to explore the association of FI, ESG and poverty with the SPI. Panel data estimation is conducted to arrive at the results. Findings: The findings of this study highlight mixed outcomes for FI. ESG is positively associated with SPI, but poverty is not associated with SPI. These findings imply that an increase in FI may reduce the statistical capacity of the nations. An increase in ESG increases the capacity. However, change in poverty does not influence the SPI. The recommendation based on this study’s outcome suggests auditing the FI and poverty vis-à-vis SPI to ensure SPI’s veracity and robustness in the long run. Originality/value: The way in which the individual social, economic and environmental indicators influence the SPI needs to be tested to establish the veracity and robustness of the SPI, which is barely researched as observed in the literature. © 2023, Emerald Publishing Limited.

Authors: Rastogi, S. ,Bhimavarapu, V.M. ,Kanoujiya, J.
Journal: Vision
Publication date: 01 November 2023
Publisher: Sage Publications India Pvt. Ltd
URL: Access Paper

Abstract

Banks are facing varied issues worldwide. The existing set of performance measures of banks lack a cohesive and concerted approach for adequate fulfilment of the purpose. This study proposes a holistic view of the bank performance, which includes profitability, risk-taking (non-performing asset [NPA]), and regulation. It has been observed that Indian banks fare miserably in this litmus test of comprehensive performance measure. The meanest of the expectation that NPA should be affected by the regulatory mechanism is found surprisingly missing in the Indian banks. The existing literature has not taken a holistic view of bank performance, and therefore, the findings of this study provide enough impetus to all the stakeholders of the banks to respond. Policy makers and regulatory bodies can redirect both the banking governance and regulation so that the basic tenet of comprehensive bank performance expectations, as raised in this study, are met reasonably. © 2021 MDI.

Authors: Rastogi, S. ,Tejasmayee, P. ,Kanoujiya, J. ,Banerjee, Souvik, Parashar, Neha, Dani, Asmita
Journal: Journal of Risk and Financial Management
Publication date: 01 October 2023
Publisher: Multidisciplinary Digital Publishing Institute (MDPI)
URL: Access Paper

Abstract

The literature abounds with studies on the impact of the growth of nations on the environment. However, studies on the financial materiality of environmental concerns are found less often. This study aims to determine the impact of environmental concerns on a nation’s GDP per capita (GDPC). In addition, the influence of developed nations and democracy is also explored. The data for 106 countries and ten years (2011–2020) are procured from World Bank’s official website. The countries with incomplete data for a balanced panel are not included. Panel data econometrics (quantile regression) is applied to analyze the data. Environmental concerns are measured with the help of environmental efficiency (EE) using data envelopment analysis (DEA). It is found that environmental efficiency (EE) negatively impacts the GDPC for low levels of GDPC. However, no association of EE with GDPC is witnessed in the case of high GDPC levels. In addition, developed nations positively moderate the EE’s impact on the GDPC when the GDPC levels are high. Moreover, democratic nations negatively moderate the EE’s impact on the GDPC when low GDPC levels exist. The main implication of the current study is that developed high GDPC countries could bear a significant chunk of the cost of EE. This way, the adverse impact of an increase in EE on the GDPC (by low GDPC counties) could be dodged, and by the efforts of developed high GDPC countries, EE could be increased significantly without adversely impacting their GDPC.

Authors: Sidhu, A.V. , Abraham, R. , Bhimavarapu, V.M. , Kanoujiya, J. , Rastogi, S.
Journal: Journal of Risk and Financial Management
Publication date: 01 September 2023
Publisher: Multidisciplinary Digital Publishing Institute (MDPI)
URL: Access Paper

Abstract

The current study investigates the impact of the liquidity coverage ratio (LCR) on the efficiency of Indian banks for the period 2010 to 2019. The study examines the effect of internal bank elements like ownership structure, transparency and disclosure, and technological advancement on the relationship between the LCR and efficiency. Bank efficiency proxied as technical efficiency is evaluated by applying the data envelope analysis approach. Applying the panel data regression technique, the authors discover that the LCR has a positive impact on the technical efficiency at a constant return to scale of banks. The relationship between the LCR and the technical efficiency at a variable return to scale is non-linear. Initially, as liquidity increases, the efficiency of banks improves, after reaching its optimum level, efficiency starts to decline. Furthermore, liquidity tends to improve efficiency of banks with higher promoter stakes, whereas opposing results are evidenced for institutional investors and technological advancement. © 2023 by the authors.

Authors: Rastogi, S. Doifode, A. Kanoujiya, J. Singh, S.P.
Journal: South Asian Journal of Business Studies
Publication date: 30 August 2023
Publisher: Emerald Publishing
URL: Access Paper

Abstract

Crude 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/approach: This 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. Findings: The 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 implications: Gold 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/value: Gold 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. © 2021, Emerald Publishing Limited.

Authors: Parkhi, S. Singh, S. Pushp, A. Rastogi, S. Gautam, R.S.
Journal: ACM International Conference Proceeding Series,
Publication date: 3 August 2023
Publisher: Association for Computing Machinery
URL: Access Paper

Abstract

The purpose of this article is to examine how financial leverage affects financial performance and the moderating role of efficiency in the relationship. This study uses data from 76 firms listed on the bombay stock exchange during the period from 2011 to 2020, resulting in 760 firm-year observations. A quantile regression panel data model is used to investigate the hypotheses of this study. The results reveal that financial leverage has a negative and significant effect on financial performance. Furthermore, the findings indicate that firm’s performance improves with an increase in efficiency and leverage. Moderate evidence that an increase in efficiency exacerbates the negative association between leverage and performance. The results of this study have important implications for firms in emerging markets. Managers can enhance firm performance by reducing the level of financial leverage, especially in firms with low technical efficiency. These firms incur higher overheads, and then they can benefit more from the decreases in debt ratio in their capital structure. To the author’s knowledge, this research is the first to examine the effect of technical efficiency on the financial leverage-financial performance relationship and is one of few that investigate the role of efficiency in determining the linkage between leverage and firm performance. © 2023 ACM.

Authors: Kanoujiya, J Jain, Pooja Banerjee, Souvik Kalra, Rameesha Rastogi, Shailesh Bhimavarapu, Venkata Mrudula
Journal: Journal of Risk and Financial Management
Publication date: 01 August 2023
Publisher: Multidisciplinary Digital Publishing Institute (MDPI)
URL: Access Paper

Abstract

The firm’s valuation (FV) is the key element for all stakeholders, particularly the investors, for their investment decisions. The main impetus of this research is to estimate the effects of the debt ratio (DR, i.e., leverage) on the FV (i.e., assets and market capitalisation) of the non-financial firms listed in India. The quantile panel data regression (QPDR) on the secondary data of 76 non-financial BSE-100 listed firms in India is employed. This study also checks the effect of the net profit margin (NPM) as profitability on the association between DR and FV. The QPDR estimates result in multiple quantiles and provide evidence in scenarios. The findings reveal a positive relationship of DR to assets only in higher quantiles, i.e., 90%ile), and a negative association of DR is found with a market capitalisation in all quantiles. Under the interaction effect, profitability (NPM) does not affect the association of DR with assets but negatively affects the association of debt ratio with market capitalisation in the middle (50%) quantile. The findings indicate that leverage (DR) affects a firm’s value. The study’s outcomes are helpful to all stakeholders, particularly investors, to realise the leverage (DR) as a critical indicator of FV before making any investment decisions. Managers should also consider lower debt ratios for better firm value. The present analysis is original and holds novelty in the form of the moderating role of the net profit margin, i.e., the profitability of the firm between DR and FV in the non-financial firm in India. To the best of our knowledge, no such studies have been performed to look for the association of the debt ratio with a firm’s value under the effect of profitability in different quantiles using quantile regression.

Authors: Rastogi, S. Kanoujiya, J.
Journal: Tourism Review,
Publication date: 11 July 2023
Publisher: Emerald Publishing
URL: Access Paper

Abstract

This study aims to determine the mutual association between the volatility of macroeconomic indicators (MIs) and India’s tourism demand. Design/methodology/approach: Bivariate generalized autoregressive conditional heteroscedasticity (GARCH) models are applied to estimate the volatility spillover effect (VSE) from one market to another. Compared to the other methods, bivariate GARCH has wide acceptance for estimating the VSE. The monthly MIs and tourism demand data (2012–2021) are gathered for empirical analysis. Findings: The evidence of the growth-led tourism (GLT) demand is seen. In the short term, tourism-led growth (TLG) is indicated. However, this TLG does not sustain itself in the long run. There is significant evidence in favour of the VSE from the MIs to the tourism demand ensuring GLT in India. Practical implications: The main implication of the current study is to ignore the short-term influence of tourism demand on the economy because it does not sustain itself in the long run. However, the long-term influence of macroeconomic indicators on tourism demand should be seen with caution. Hedging, if possible, may be considered to protect the tourism sector’s interests from adverse economic fallouts. Originality/value: There is a lack of studies on the volatility (especially on the VSE) between MIs and tourism demand. Hence, this study fills the research gap and presents a novel and unique contribution to the extent of the knowledge body on the topic and significantly contributes. © 2023, Emerald Publishing Limited.

Authors: Kanoujiya, J. Rastogi, S. Abraham, R. Bhimavarapu, V.M.
Journal: Journal of Risk and Financial Management
Publication date: 01 July 2023
Publisher: Multidisciplinary Digital Publishing Institute (MDPI)
URL: Access Paper

Abstract

Firms’ financial distress (FD) is a major issue for smooth business activities. Timely recognition of FD should be a prime concern; otherwise, it may cause a nasty bankruptcy situation. The FD issue is paramount to researchers, policymakers, and investors. Several factors, whether they are financial or non-financial, may be responsible for financial distress. Such aspects specific to the firms have been explored. Exogenous factors such as competition can also be responsible for a firm’s FD situation. In view of this, this study proposes to determine competition’s impact on financial distress in the Indian context. BSE 100 (“Bombay Stock Exchange”)-listed non-financial firms (NFFs) in India, over a timeframe of 2016–2020, are incorporated in this study. Panel data econometrics is performed for hypothesis testing. This study is novel in its approach, employing multi-technique analysis for measuring financial distress. FD is measured using Altman Z-scores, BOS, and AC distress scores variants. The Boone index (BI) and Lerner index (LI) are undertaken for the competition assessment of NFFs in India. The findings have contrasting views based on BI and LI; BI is positively connected to Z-scores; however, LI negatively connects to Z-scores. The findings suggest that competition (reverse of BI) positively affects financial distress (reverse of Z-score), while competition (reverse of LI) has an adverse effect on FD. It is also found that competition as BI affects FD non-linearly (inverted U shape connection). This means that competition (or market power) initially increases financial distress (or financial stability), and after a specific limit, it reduces financial distress. It can also be said that market power improves financial soundness to a specific limit, and after that, it starts decreasing financial stability. The study’s findings provide fresh and exciting evidence for the connectivity of competition and financial distress. This situation has noticeable implications for all stakeholders and policymakers concerned with the survival of Indian listed firms. The significant connection of competition with financial distress implies that all stakeholders should consider competition an essential element for a firm’s financial distress. © 2023 by the authors.

Authors: Kappal, J.M. ,Rastogi, S.
Journal: Kappal, J.M., Rastogi, S.
Publication date: 01 June 2023
Publisher:Indian Institute of Finance
URL: Access Paper

Abstract

The objective of this paper is to understand the determinants of financial satisfaction in women entrepreneurs in their personal investment decisions. The study focusses on five behavioural biases – overconfidence, conservatism, mental accounting, loss aversion and self-control, which are considered as second order construct: investor bias. Other factors that influence financial satisfaction of women entrepreneurs are parental influence, expert advice, spouse effect and financial knowledge. The study further evaluates the relationship between investor bias, time for investment and financial satisfaction. A structured survey form was floated and inputs collected were analysed using Smart PLS 3. Study found that financial satisfaction in women entrepreneurs is impacted by investor bias, parental influence and expert advice. Time for investment does not moderate the relationship between individual investor bias and financial satisfaction. © Indian Institute of Finance.

Authors: Bhimavarapu, V.M. Rastogi, S. Mulay, P.
Journal: FIIB Business Review,
Publication date: 01 June 2023
Publisher: Sage Publications India Pvt. Ltd
URL: Access Paper

Abstract

Corporate transparency is a critical requirement for effective governance. Through a thorough financial regulation, it has the potential to influence investors’ investment decisions in a company. The global financial crisis, in the past, has prompted a high level of openness worldwide since it frequently implies the quality of information disclosure. To make investment decisions, investors rely on the information provided by the firms. Hence it is crucial to have an encyclopaedic understanding of corporate disclosures. This research employs bibliometric analysis from a multi-industry approach to systematically synthesize and improve corporate transparency and disclosures. For 23 years, 410 journal articles were collected from the Scopus database between 1998 and 2021. This article highlights the publication trend and identifies the most influential work, authors, countries and journals. Finally, the Author, Journal and keyword co-occurrence have expressed the article’s research themes through thematic progression. Lastly, the article highlights the gaps in the literature and makes recommendations for further research. © 2023 Fortune Institute of International Business.

Authors: Pushp, A` .Gautam, R.S. Tripathi, V. Kanoujiya, Jagjeevan Rastogi, Shailesh Bhimavarapu, V.M. 
Journal: Journal of Risk and Financial Management
Publication date: 01 May 2023
Publisher: MDPI
URL: Access Paper

Abstract

Financial inclusion is an emerging economic growth paradigm, especially in developing economies like India. It is an essential barometer for the all-encompassing growth of a country and its economy. However, there is still a debate regarding the effect of Financial Inclusion (FI) on achieving sustainable development. This study aims to determine if FI helps achieve Sustainable Development Growth (SDG) in India and if internet subscribers significantly influence the connection between FI and SDG. Secondary data from 16 states and one UT in India have been collected for 2017–2019. Therefore, the sample data is recent and covers a large country span. The data source is NITI Aayog and PMFBY (“Pradhan Mantri Fasal Bhima Yojana”) reports. The findings of this research are that FI has a positively significant relationship with sustainable development goals (SDG) in India. However, when the internet subscribers are high, the FI’s positive association with SDG gets reduced. PMFBY and SDG have been used for the first time, along with internet subscribers as moderators. The outcome has direct policy implications for improving the nation’s financial inclusion and economic growth. © 2023 by the authors.

Authors: Singh, K.,Rastogi, S.
Journal: Benchmarking
Publication date: 14 April 2023
Publisher: Emerald Publishing
URL: Access Paper

Abstract

Corporate governance across small and medium enterprises (SMEs) is undergoing unremitting changes, primarily due to the listing of SMEs on SME exchanges. The changing aspects of governance may influence the financial performance of SMEs. This paper examines how corporate governance influences the financial performance of listed SMEs in the context of developing economies like India. Ownership concentration (promoters’ holding) and information disclosures measure corporate governance in this examination. Design/methodology/approach: The sample for this study includes 88 listed SMEs from the Bombay Stock Exchange (BSE) SME platform in India. The data are collected for the period between 2018 and 2020. The study employs panel data analysis. The fixed effects model, coupled with the computation of cluster robust standard errors, is used to test the relationship between variables. Findings: The results demonstrate that ownership concentration is not significantly related to financial performance. Further, information disclosures are inversely significant for financial performance. The results show that agency problems and information asymmetry plague the sampled firms. Further, the results of the study are indicative of inefficiencies in the governance structures of SMEs. Thus, it is evident that listed SMEs fail to reap the benefits of corporate governance. Practical implications: The study’s findings should enlighten SME owners and managers on the benefits of corporate governance for SMEs. This is a pressing need at current times as the listing of SMEs is shifting the landscape of SME governance. Today, all firms, including SMEs, are expected to adopt and maintain near internationally benchmarked corporate governance standards. Secondly, the study’s implications on how the ownership and information disclosures can be used to influence the financial outcomes of SMEs will benefit the overall business ecosystem. The policyholders and academics can use this study to boost the regulations and research in line with each other. Originality/value: Reforming monitoring mechanisms of firm activities and restructuring disclosure practices are essential for SMEs to produce better financial outcomes. The true benefits of corporate governance cannot be realized without attention to financial performance. The study is relevant to practitioners, lawmakers and academics to advance corporate governance for SMEs. © 2022, Emerald Publishing Limited.

Authors: Kanoujiya, J. Abraham, R. Rastogi, S. Bhimavarapu, V.M.
Journal: Journal of Risk and Financial Management,
Publication date: 01 April 2023
Publisher: MDPI
URL: Access Paper

Abstract

Transparency and disclosure (T&D) of information trigger the interest of all stakeholders, including investors in a company. Cognizance of the company’s financial health before investing is very necessary. Disclosure of information in the firm’s financial reports reflects the firm’s financial performance. A firm’s financial health protects investors’ and other stakeholders’ interests and the firm’s long-term sustainability. Owing to the importance of T&D and a firm’s financial health, this paper investigates the impact of T&D on the financial distress (FD) of non-financial firms (NFFs) listed in India. This study examines both linear and nonlinear connectivity of T&D and financial distress (FD). Their association is also investigated in a competitive scenario (under the moderating effect of competition). The panel data analysis is incorporated into the study having 78 NFFs as cross-sectional units with a timeframe from 2016 to 2020. Altman Z-score measures a firm’s FD (higher Z-score means low FD). BOS (Berger, Ofek and Swary) and AC (Almeida and Campello) scores are taken to consider investors’ perspectives of the firm’s FD. The T&D and Lerner indexes are used to assess the level of T&D and competition. The findings reveal that a higher T&D level decreases a firm’s financial stability or increases a firm’s FD. In nonlinear association, it is found that T&D has an inverted U-curved connection with financial stability or U-curved association with FD. It indicates that initially, higher T&D reduces FD, and after a threshold, it increases FD. However, under competition, T&D is not found to be significantly impactful for FD. The study is novel as no previous study has focused on such association under competition and taking investors’ perspective of a firm’s FD. © 2023 by the authors.

Authors: Thakur, S. Rastogi, S. Parashar, N. Tejasmayee, P. Kappal, J.M.
Journal: Journal of Risk and Financial Management
Publication date: 01 April 2023
Publisher: MDPI
URL: Access Paper

Abstract

The role of Information and Communications Technology (ICT) cannot be ignored in today’s era of working. Its effects are studied in several sectors by various researchers. This study covers the impact of ICT on the profitability of banks. Thirty-three banks are operating in India. A sample period of 10 years (2010 to 2019) was studied. The study also provides insight into how ICT helps the banks’ profitability during and post-COVID-19. A panel data analysis is performed to estimate the results. This study found that ICT adversely impacts banks’ profitability (NIM) in India in a linear association. However, the quadratic association indicates a positive U-curved relationship between ICT and profitability. In addition, the Net of Non-Performing Assets significantly but negatively impacts the connectivity of ICT and profitability. The findings imply that banks should invest in ICT to maximize the long run. The findings have no significant implication on all stakeholders, including policymakers, shareholders, and managers, to consider implementing ICT tools as an essential factor in enhancing a bank’s profitability in the long run. In addition, the level of otherwise lowered investments in ICT cannot be a fruitful step. The current study augments the existing literature on banking by providing novel evidence on the association of ICT with profitability under the influence of NPA. This study argues for the application of ICT in banks in order to increase their profitability. ICT helps the bank maintain transparency, accountability, and even the reach of financial services increases. This situation again leads to the enhancement of the country’s economy. © 2023 by the authors.

Authors: Kanoujiya, J. Singh, K. Rastogi, S.
Journal: Managerial Finance
Publication date: 27 March 2023
Publisher: Emerald Publishing
URL: Access Paper

Abstract

Ownership concentration (OC) is an essential element of corporate governance (CG) for a firm’s performance. The purpose of the study is to investigate the connectivity of OC (particularly considering promoters’ holdings) with the firm’s financial distress (FD) of non-financial firms (NFF) listed in India. Design/methodology/approach: The panel data regression analysis (applying quantile regression for the 25th quantile, 50th quantile, and 75th quantile) is employed to inspect the connection between OC (promoters’ holdings) and the firm’s FD (computed using Altman Z-scores). The data for a cross-section of 78 listed firms (non-financial) in India, considering the time frame of five years (2015–16 to 2019–20), are cumulated for the study. The leverage (leverage ratio), competition (Lerner index), valuation (mcap), sales, and profitability (net profit margin) variables are incorporated as control variables. Findings: The study’s findings reveal that OC (promoters’ holdings) positively relates to the firm’s FD because OC negatively associates with Zscore (as Zscore is inverse to FD). Additionally, the non-linear association also indicates positive connectivity of OC and Zscore (a U shape association), alternatively showing a negative non-linear connection of OC (promoters’ holdings) with the firm’s FD (inverse U shape association). This result implies that initially, promoters’ holdings enhance the firm’s FD, and after a maximum threshold, promoters’ holdings start reducing FD in non-financial listed firms in India. The findings also show an interesting aspect of OC at different quantiles. The results indicate that a higher OC is powerful when distress is both high and low to achieve stability. Conversely, less OC among promoters is required to achieve such stability when the distress is medium (50th quantile). Research limitations/implications: The scope of the study is limited to NFFs listed in India, which is one of the limitations of the present paper. Hence, this does not provide evidence for financial firms. Only one aspect of OC (promoters’ holdings) is considered in the current study. However, OC can also be explored for FD in terms of institutional and retail investors. These limitations can be considered as the present study’s future scope. Originality/value: Most of the studies regarding OC have explored the broader aspect of OC. However, the current study has narrowed the OC to promoters’ holdings. No other study exclusively examines the association of OC (as promoters’ holdings) with the firm’s FD. Promoters’ holdings have a more significant role in a firm’s CG practices because of direct involvement of promoters’ holdings in business activities. Thus, the present study’s findings have notable implications for managers, policymakers, and investors concerned with the financial health of firms. © 2022, Emerald Publishing Limited.

Authors: Singh, K. ,Rastogi, S.
Journal: Journal of Global Responsibility
Publication date: 23 March 2023
Publisher: Emerald Publishing
URL: Access Paper

Abstract

The banking sector is undergoing a phase of transition worldwide. The degrees of flux may vary from country to country. Metamorphosis causes include financial distress, corporate governance issues, environmental and social issues and an avalanche of technological advancements. This study aims to explore how environmental, social and governance (ESG), one of the essential and contemporary change agents across the sectors, including in the banks, impacts the valuation of the banking sector. In addition, this study also aims at how another vital and inevitable change agent, information and communications technology (ICT) expenses, influence the ESG’s impact on bank valuation. Design/methodology/approach: Panel data regression is conducted using valuation (Tobin’s Q and market capitalization) as endogenous variables, and ESG and expenditure on ICT are used as the main exogenous variables. The interaction term of ESG and ICT is also used as an exogenous variable. Findings: Surprisingly, the authors find unequivocal evidence of the positive influence of ESG and ICT on bank valuation without consideration of ICT. In addition, ICT is also found to moderate the ESG’s influence on bank valuation positively. In particular, when ICT is low, an increase in ESG impacts the valuation negatively. However, high values of ICT cause ESG to impact the valuation positively. Research limitations/implications: Without consideration of ICT, ESG investments coincide with the value-creating hypothesis. However, modern world firms do not have a choice of ignoring ICT, which is essential to sustain. Adequate investments in ICT shift the value-eroding ESG effects (at low ICT) toward a value-creating hypothesis (at high ICT) when ESG investments start to impact the value positively. Practical implications: In practice, modern-day firms have no choice but to align with ESG investments. In cases where ESG tends to erode value (at low ICT), the firms should, in parallel, choose to make some ICT investments. Such combined and balanced attention to ICT, along with ESG, will undoubtedly benefit the firms financially. Originality/value: The study’s significant implications are on the stakeholders’ mindsets, who may not have clarity on the role of ESG and ICT in the bank’s performance and subsequent valuation. The policymakers may also restructure their long-term policy on ESG in the banking sector using the current study’s findings. © 2022, Emerald Publishing Limited.

Authors: Goel, A. ,Rastogi, S.
Journal: Review of Behavioral Finance
Publication date: 14 March 2023
Publisher: Emerald Publishing
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Abstract

The purpose of the study is to identify certain behavioural and psychological traits of the borrowers which have the tendency to predict the credit risk of the borrowers. And the second objective is to draw a conceptual model that reveals the impact of those traits on credit default. Design/methodology/approach: The study has adopted a systematic Literature Review approach to identify those behavioural and psychological traits of borrowers that reflect on the tendency to predict the credit default of borrowers. Findings: The findings of this study have revealed that there are some non-financial factors, which can be looked into while granting a loan to a borrower. The identified factors can be used to develop a subjective credit scoring model that can quantify and verify the soft information (character and reliability) of debtors. Further, a behavioural credit scoring model will help in easing the assessment of those borrowers, who do not have an appropriate credit history and reliable financial statements. Practical implications: The proposed model would help banks and financial institutions to evaluate those borrowers who lack substantial financial information. Further, a subjective credit scoring model would help to evaluate the credit worthiness of such borrowers who do not have any credit history. The model would also reduce the biasness of subjective scoring and would reduce the financial constraints of borrowers. Originality/value: By reviewing the literature, it has been observed that there are very few studies that have exclusively considered the behavioural and psychological factors in credit scoring. Several studies have linked the psychological constructs with debts, but very few researchers have considered it while constructing a behavioural scoring model. Thus, it can be inferred that this area of behavioural finance is still unexplored and needs attention of researchers worldwide. In addition, most of the studies are carried out in European, African and American regions but are almost non-existent in the Asian markets. © 2021, Emerald Publishing Limited.

Authors: Abraham, R. Bhimavarapu, V.M. Tao, Z. Rastogi, S.
Journal: Journal of Risk and Financial Management
Publication date: 01 March 2023
Publisher: MDPI
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Abstract

Cash ownership emits a powerful positive signal. We examine four sources of cash in firms, i.e., cash flows, cash holdings, cash proceeds from debt, and cash proceeds from equity. We examine the effects of cash ownership for firms growing by disruption, and firms growing by acquisition. Information signaling theory maintains that free cash flows may be used to increase shareholder wealth. Two-stage least squares regressions determined the impact of cash funding on disruptors and size of acquisition in the first stage, and cash-funded disruption or cash-funded acquisition in the second stage, for a US sample of 832 disruptor firms and 924 acquirers, from 2000–2020. Disruptions funded by cash holdings, cash flow, and cash proceeds from debt, significantly increased stock returns. A size effect was observed, with small disruptors showing significant effects. Acquisitions funded by cash holdings, cash flow, and cash proceeds from debt, significantly increased stock returns and return on assets. Agency costs significantly reduced returns and profits. Results for disruptions and acquisitions support signaling theory with free cash flows signaling higher share prices for both disruptors and acquirers, and higher profits for acquirers.

Authors: Sidhu, A.V. Jain, P. Singh, S.P. Kanoujiya, Jagjeevan Rawal, Aashi Rastogi
Journal: Journal of Risk and Financial Management
Publication date: 01 February 2023
Publisher: MDPI
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Abstract

The present study primarily examines the impact of financial distress (FD) on the dividend policy of 33 banks working in the Indian economy from 2010 to 2019. In addition, we further explore the association between financial distress and dividend policy under the influence of shareholder activism (SHA). Using the static panel data regression technique, it is revealed that financial distress is non-linearly associated with the dividend policy of banks in an inverted U-shape. In the initial phase of a distressing situation, banks tend to have a liberal dividend policy. However, after reaching the pressure point, the banks start to squeeze dividend distribution to the stakeholders. Furthermore, the significant impact of shareholder activism has been found in the association between financial distress and the dividend payout policy of banks. From the policy perspective, the study will provide the policymakers with a clear all-round perspective of distressing situations, as the current research involves exploring the impact of distress on the dividend policy that will help the experts in basically understanding the adverse effect of financial distress and the repercussions, respectively, on the earning of the shareholders.

Authors: Gautam, R.S. Bhimavarapu, V.M. Rastogi, S. Kappal, Jyoti Mehndiratta P
Journal: Journal of Risk and Financial Management
Publication date: 01 March 2023
Publisher: MDPI
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Abstract

This study investigates the impact of corporate social responsibility (CSR) funding in the education sector and the environment and how it affects India’s sustainable development. This study was conducted using secondary data and the data were collected from 28 Indian states and three union territories for the four fiscal years 2018 to 2021. This study examines the hypothesis using the generalized method of moments (GMM). As a result, it is found that overall CSR funding positively contributes to India’s sustainable development. Additionally, this study finds that CSR funding in education and the environment supports India’s sustainable development. It is also observed that, under the interaction effect of poverty (poverty score), CSR funding (total) and CSR funding on education positively affect sustainable growth. However, CSR funding for environmental activities does not significantly influence India’s FD under the moderation of poverty score. These factors are essential for India’s sustainable development and poverty reduction. Investing CSR funds in rural development, education, the environment, health, and other areas supporting India’s sustainable development leads to impressive economic growth and reduces poverty. Hence, it is attributed that CSR funding plays a vital role in India’s sustainable development. Future research can be carried out on CSR policies and funding using different variables and periods.

Authors: Agarwal, B. Gautam, R.S. Jain, Pooja Rastogi, Shailesh Bhimavarapu, V.M Singh, S.
Journal: Journal of Risk and Financial Management
Publication date: 01 March 2023
Publisher: MDPI
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Abstract

Environmental, social, and governance (ESG) activities have become essential and viable activities of corporations because of the increase in concern for environmental, social, and governance issues. The motive of this research is to measure the effect of ESG on the financial performance (FP) of healthcare corporations using the market-to-book value (MTB) ratio as a proxy of FP. A sample of 33 pharma companies in India from 2011 to 2020 has been considered. The study relies on the panel data method to assess the association between ESG and FP. The potential moderating role of competition has also been studied to simplify their relationship in this framework. The finding of this study is that there is a significant negative association between ESG and FP, and it is also found that when competition is used as a moderator, it results in a significantly positive impact on the ESG and FP of healthcare companies. This study increases the understanding of the association between ESG and FP and helps corporations to formulate corporate strategies and stakeholders to make investment decisions. The originality of this study is that it addresses the impact of competition on ESG and FP of the healthcare industry and will become foundational literature for future studies

Authors: Bhimavarapu, V.M. Rastogi, S. Kanoujiya, J.
Journal: Corporate Governance (Bingley)
Publication date: 26 January 2023
Publisher: Emerald Publishing
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Abstract

The disclosures in banks have become a matter of grave concern, especially post 2008 world financial crisis. The issue further gets exacerbated because disclosers in banks are part of the III pillar of BASEL-II floated in 1999, and despite that, banks face challenges in this regard. Ownership concentration (OC) is a point of discussion because it may affect banks’ corporate governance and transparency and disclosures (T&D) issues. This study aims to determine how OC affects the transparency in the banks. Design/methodology/approach: A T&D index is built into the study covering all the relevant contemporary issues regarding disclosures in banks. The panel data specification is used to find out the association of components of the OC on the T&D practices in the banks. Bank data of 34 banks are gathered for four years for the study. Findings: It is found that except for retail investors, other classes of OC are not concerned with the disclosures in the banks even though substantial financial and non-financial interests are at stake concerning them. The study’s findings suggest framing policies and regulations considering the accountability of promoters and institutional investors for ensuring disclosures in banks. Research limitations/implications: A few proxies to measure T&D found in the literature have not been used in the study. Similarly, the definition of promoter’s class of investors can be improved. Originality/value: To the best of the authors’ knowledge, no other study builds T&D for banks and examines their impact because of the ownership classes (as used by the current study). This study is unique in this aspect.

Authors: Goel, A. ,Rastogi, S.
Journal: Journal of Entrepreneurship in Emerging Economies
Publication date: 20 January 2023
Publisher: Emerald Publishing
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Abstract

This study aims to formulate a behavioural credit scoring models for Indian small and medium enterprises (SME) entrepreneurs using certain behavioural and psychological constructs. Two separate models are built which can predict the credit default and wilful default of the borrowers, respectively. This research was undertaken to understand whether certain psychological and behavioural factors can significantly predict the borrowers’ credit and wilful default. Design/methodology/approach: A questionnaire survey was undertaken by SME entrepreneurs of two Indian states, i.e. Uttar Pradesh and Maharashtra. The questionnaire had two dependent variables: wilful default and credit default and nine independent variables. The questionnaire reliability and validity were ensured through confirmatory factor analysis (CFA) and further a model was built using logistic regression. Findings: The results of this study have shown that certain behavioural and psychological traits of the borrowers can significantly predict borrowers’ default. These variables can be used to predict the overall creditworthiness of SME borrowers. Practical implications: The findings of this research indicate that using behavioural and psychological constructs, lending institutions can easily evaluate the credit worthiness of those borrowers, who do not have any financial and credit history. This will enhance the capability of financial institutions to evaluate opaque SME borrowers. Originality/value: There are very few numbers of studies which have considered predicting the credit default using certain psychological variables, but with respect to Asian market, and especially India, there does not exist a single significant study which has tried to fulfil such research gap. Also, this is the first study that has explored whether certain psychological factors can predict the wilful default of the borrowers. This is one of the most significant contributions of this research.

Authors: Goel, A. ,Rastogi, S.
Journal: International Journal of Business and Globalisation,
Publication date: 2023
Publisher: Inderscience Publishers
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Abstract

Credit officers act as a pivot in the loan decision-making process, which is greatly affected by their assessment. The objective of this research is to examine the lending decision criteria of bankers. To attain this objective, qualitative methodology has been adopted for this research. In-depth interviews of 12 credit officers were undertaken. For the analysis, thematic approach was adopted. Three main themes emerged from the thematic analysis. The first theme relates the complimentary existence of transactional and relationship lending. The second theme discloses the information sought by lenders under transactional lending approach. The third and major theme of this research (which emerged from this study) is the identification of data affecting the subjective decisions of credit officers. Investigation revealed that, while taking loan decisions, credit officers place emphasis on borrower’s certain characteristics such as his/her political background, egotism, business skills, age, experience and previous defaults. The findings of this study provide a new understanding of the factors that are perceived by lenders while evaluating a loan applicant. This is the first study reporting the factors that affect the subjective judgements of credit officers.

Authors: Rastogi, S. Singh, K. Kanoujiya, J.
Journal: Asian Review of Accounting
Publication date: 2023
Publisher: Emerald Publishing
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Abstract

The study intends to determine the environment, social and governance (ESG)’s impact on the firm’s value. In addition, how ownership concentration (OC) and transparency and disclosures (TD) influence the impact of firm’s ESG on its valuation (firm value). Design/methodology/approach: The relevant panel data with a sample of 78 Indian firms for five years (2016–2020) are gathered. Both linear and nonlinear connections of firm’s ESG with its value are tested. In addition, TD and two components of OC (stakes of promoters and institutional investors) are empirically tested as moderators on the connectivity of the firm’s ESG with its value. Findings: The linear association of firm’s ESG with its value is found insignificant. ESG is found to have a positive and nonlinear (U-shaped) impact on the value of the firms. TD does not moderate the connectivity of firm’s ESG with its valuation (firm value). The higher stakes of promoters positively affect the association of firm’s ESG with the valuation. However, the high stakes of institutional investors retard the ESG’s influence on the firm value. Research limitations/implications: The study is on Indian firms for five years. A sample of more than one nation and a longer duration (10 years) could have helped better determine the associations among the variables. In turn, these limitations can be the present study’s future scope. In addition, the authors find a lack of standardisation of the ESG scales, which is a problem in measuring it. Using standardisation scales of ESG for the analysis can also be future scope on the topic. Practical implications: The investors would be wary of the level of ESG to influence the firms’ value positively. Managers also need to be careful to have sincere efforts for ESG to reap its rich dividends. Policymakers may take cognisance that despite having board seats (in a few cases), institutional investors negatively (instead of positively as expected) influences the ESG’s association with the firm’s value. They may bring some guidelines or legislative changes to fix responsibility on the part of the institutional investors. Originality/value: No study reports the linear and nonlinear association of ESG on the firm’s value to observe clearer connectivity between the two. Similarly, no study is observed to have promoters and institutional investors as moderators on the association of firm’s ESG with the valuation (firm value). Hence, the present study considerably augments the extant literature on the topic and its contribution.

Authors: Kanoujiya, J. Pal, S. Rastogi, S.
Journal: Asia Pacific Journal of Tourism Research
Publication date: 04 March 2023
Publisher: Routledge
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Abstract

Cryptocurrencies and tourism have gained traction worldwide in the last few years. However, no research has been conducted to understand the relationship between the two. This paper examines the impact of the volatility spillover effects (VSE) of cryptocurrencies on the tourism sector in India. Using monthly time-series data (from August 2015 to January 2021) of the selected cryptocurrencies and foreign tourist arrivals (FTA) and foreign exchange earnings (FEE) from foreign tourism, we assess the volatility (short and long-term) impacts of cryptocurrencies on tourism (through changes in the monthly number of FTAs in India and FEEs of India through foreign tourism). The study applies Multivariate GARCH models (BEKK-GARCH and mGJR-GARCH). The findings suggest that there is an existence of volatility connections between cryptocurrencies and foreign tourism in India. These findings have noticeable implications for policymakers to understand the importance of cryptocurrency and blockchain for tourism sector policies in India.

Authors: Tejasmayee, P. Rastogi, S. Pushp, A. Agarwal, Bhakti Singh, S. Thakur, S.
Journal: 2023 8th International Conference on Business and Industrial Research, ICBIR 2023
Publication date: 18 May 2023
Publisher: Institute of Electrical and Electronics Engineers Inc.
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Abstract

The study aims to evaluate the effective and successful implementation of Sustainable Development Goals (SDGs). In order to help and liberate the residents with all types of financial services, our focus will be on expanding the financial services to the underdeveloped and rural areas of India. The relationship between financial inclusion (FI) and SDGs is examined in this paper. The Panel Data Model (PDM). was employed to produce this outcome. STATA version 15 is utilized in the study to run the correlation and linear regression analysis tool. The findings show a strong relationship between our proxies, or the number of IPPB branches and access points, and the SDGs. Our research can be used to create new financial regulations for sustainable growth. This may persuade the government to increase the number of IPPB access points. Researchers may use this study to look into other factors that can be used to advance the level of development. Future research may examine more financial inclusion proxies. Our findings might be outdated, given the ongoing emergence of new technologies. The federal government is working hard to promote equitable growth.

Authors: Tejasmayee, P. Rastogi, S. Pushp, A. Agarwal, Bhakti Singh, S. Thakur, S.
Journal: 2023 8th International Conference on Business and Industrial Research, ICBIR 2023
Publication date: 18 May 2023
Publisher: Institute of Electrical and Electronics Engineers Inc.
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Abstract

Since the beginning, agriculture has been the backbone of the Indian economy. The farmers have always received help from the Indian financial system to help them effectively complete their jobs. The use of financial services significantly impacts agriculture in the short and long term. The study’s main objective is to promote inclusive growth while strengthening the agricultural industry. The study uses the number of Indian post-payment bank branches and their access points as proxies for financial inclusion because it seeks to assess the effect of financial inclusion on the net value provided by agricultural activities to the development of the nation. According to the results, there is a remarkable relation between the net value added by agricultural activity and our proxies or the number of IPPB branches and access points. Our study can be utilized to develop new financial policies for agriculture. Only 3-4 years of data are taken into account in the study. The trial can go on for a while longer. As new innovations take place constantly, our results could become obsolete. The government is making every effort to encourage inclusive growth; therefore, the numbers can increase in the near future.

Authors: Singh, K. ,Rastogi, S.
Journal: Benchmarking
Publication date: 2023
Publisher: Emerald Publishing
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Abstract

Public listing of small and medium enterprises (SMEs) stimulates unremitting transformations into their corporate governance (CG) practices. These transformations in CG are likely to impact the financial performance (FP). The current study examines how individual corporate CG mechanisms and their mutual interactions (configurational approach) stimulate the FP of listed SMEs. The study selects promoters’ ownership (PO), the board (B-INX) and information disclosures (DISC) as individual CG mechanisms. In addition, market competition (COMP) is considered a form of external governance/regulation. Design/methodology/approach: The study uses five years of panel data (2018–2022) of 80 SMEs listed on the Bombay Stock Exchange’s (BSE) SME listing platform in India. Panel data fixed effects and cluster robust standard errors estimated. In addition to the impact of individual CG mechanisms, their mutual interactions (configurational approach) are tested using moderated hierarchical regression and confirmed by slope tests. Findings: The results signify the ineffectiveness of individual CG mechanisms when acting in silos. However, their mutual interactions drive the FP. A hierarchy of results is obtained. PO is the dominant form of internal CG, negatively influencing the relevance of B-INX and DISC. B-INX tends to adhere to good governance by positively moderating the impact of DISC on FP. Lastly, COMP acts as external governance that dominates the ownership effects. Findings reveal that the interactions among individual CG mechanisms are essential to the FP of listed SMEs. Such interactions adjust the agency theory dynamics of CG in these firms. Research limitations/implications: The study takes a holistic approach to investigate the agency theory dynamics via the mutual interactions among multiple CG forms. It highlights how the presence of a dominant form of CG can adjust the financial effect of others, thereby adjusting agency theory dynamics. Practical implications: These results hold practical significance for SMEs in multiple ways. SMEs should embrace configurational approach to comprehend their agency dynamics. The configurational approach of CG mechanisms is the way forward for SMEs, which are known to be financially constrained. In other words, the fact that the resiliency of SMEs is very often questioned calls for the configurational approach, where different CG mechanisms coexist to drive FP. Originality/value: The study is by far the first of its kind to investigate the CG of listed SMEs against the backdrop of the configurational approach. The findings will benefit industry practitioners, academics and regulatory bodies to visualize the governance practices through the lenses of configurational approach.

Authors: Singh, K. ,Rastogi, S.
Journal: International Journal of Business and Globalisation,
Publication date: 2023
Publisher: Inderscience Publishers
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Abstract

With the changing facets in the reporting of information, voluntary information disclosure becomes the centre of all types of information disclosure. The purpose of the study is to derive various motives and the factors of the voluntary disclosures. The authors collect the published papers from the Google Scholar database by using Harzing’s Publish or Perish software. The papers for the review are selected on the bases of citation per year. The current study finds the pattern of the quality papers published in the area of voluntary disclosures. The paper discovers the major research journals and the publishers in the said area. The study presents the results of citations analysis and establishes various relationships among the sources, patterns, and the total cites and citations per year. It also presents multiple theories, types, motives, and factors associated with the concept. A conceptual framework of the voluntary disclosure is established.

Authors: Singh, K. ,Rastogi, S. ,Kanoujiya, J.
Journal: Business Perspectives and Research
Publication date: 2023
Publisher: SAGE Publications Ltd
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Abstract

There is a widespread uncertainty regarding the usefulness of shareholder activism (SA) as a part of corporate governance for firms and banks. SA has wide acceptance across the board among all the stakeholders’ participation. Since banks are the backbone of any economy, any endeavor (support to SA) creating difficulty may boomerang. Such actions do more harm than good; therefore, it is imperative to determine whether SA is beneficial to the banks or not. In this study, the SA index is built for Indian banks. The data relating to bank performance and valuation is gathered for 2016–2019. Panel data econometrics is applied to determine the impact of SA on banks performance. Results reveal that SA impacts bank performance. Furthermore, transparency and disclosure significantly moderates the association of SA with the performance. However, SA is not impacting bank valuation. It is a unique study of its kind to provide insights on SA for the banking sector.