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Book Review on "Money: What it is, How it's Created, Who Gets it, and Why it Matters

Annavajhula J C Bose

Volume 42, Issue 2 (July 2021 to December 2021)

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Consumers’ Level of Organizational Trust When Buying From Locally Owned Businesses vs. Corporations

Andy Bertsch, Mohammad Saeed, James Ondracek, Joanna Claire Miranda, Tyler Boettcher, Briley Crissler, Jacob Burckhard, Tanner Crissler, Joshua Drew

Volume 42, Issue 2 (July 2021 to December 2021)

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This paper explored the consumers’ level of organizational trust in deciding to buy from local businesses versus from corporations. This was done by investigating benevolence and integrity as constructs of trust and explored the impact of affective commitment. This paper also explored if demographics namely gender, education level, age, employment status and year in school (if they are currently attending school), had any impact on the consumers’ benevolence, integrity and affective commitment. The result of this study showed that gender did not affect the decision to purchase from local business or from corporation. Age and educational level also did not have any impact of purchase decisions. However, employed participants were committed to businesses that they frequented. Participants who felt that customer service and customer reviews were important felt a higher level of affective commitment towards businesses that they frequented.

Impact of Dividend Decision on Company Performance: An Empirical Study of Select Nifty-50 Index Companies

Haritika Chhatwal, Rachna Mahalwala

Volume 42, Issue 2 (July 2021 to December 2021)

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The dividend decision of a public listed company is vital for its various stakeholders as it is considered a yardstick to judge the financial performance of a company and its earnings generating capacity. However, the existing theoretical framework and previous empirical research relating to the effect of dividend decision on the firm's financial performance do not indicate a straightforward cause and effect relationship between the two. The present study examines the impact of dividend decision on company performance by taking a sample of listed companies on Nifty 50 index for the period 2013-14 to 2020-21. The technique of panel data regression with Pooled Least Square Estimation, Fixed Effects Model and Random Effects Model is adopted to examine the said relationship empirically. The study results find support for relevance theories, specifically bird-in-hand and signalling theory. The results establish a positive impact of dividend payment on company performance. The study results will be helpful for finance managers in determining dividend policy and for investors for making apt investment decisions.

Liquidity Aggregates in India: An Empirical Analysis of Recent Trends

Ritu Ranjan

Volume 42, Issue 2 (July 2021 to December 2021)

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The present paper empirically analyses the recent trends in real growth rates of various components of liquidity aggregates in India over the period December 2019 to April 2021. The results of breakpoint unit root test involving the application of innovational outlier model and minimisation of Dicky-Fuller t-statistic clearly establish a “structural break” in the real growth rates of both M3 and L2 thereby bearing testimony to the adverse liquidity conditions prevailing in the Indian economy. The future course of Indian economy crucially hinges on how well the monetary authority handles this formidable challenge.

Bank Monitoring as an Alternative Corporate Force and its Impact on the Value of Borrower Firm

Neeraj Kumar, Madhu Vij, Narain

Volume 42, Issue 2 (July 2021 to December 2021)

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We have analysed the effectiveness of monitoring by banks as a tool of corporate governance and the impact it has on the value of the borrowing firms. We used three indicators as proxies for strong bank monitoring on a company- a) substantial ratio of bank debt to overall debt, b) borrowings from private banks and c) sizeable banking relationships. A dataset comprising Indian non-financial companies from years 2003-2018 was used in our panel-data regression models. We considered a robust sample size of observations, consisting ~2269 firm years from public as well as private organizations. The result outcomes from our study show that all the three measures significantly impact the value of the borrower firm. However, while the share of bank borrowing as well as the type of banker are significant factors that have positive influence on the value, the number of different banking relations has an inverse impact on the same. Borrowing from multiple banks leads to drop infirm value, proving that a single bank relationship is stronger means of corporate governance as it mitigates any "free-rider" problems. This indicates that only the banks with high quality active monitoring play a key governance role, thus improving firm value.

Relationship between Brand Experience and Brand Loyalty, Mediators – Satisfaction and Brand Trust: A Conceptual Framework

Ruchika Ramakrishnan

Volume 42, Issue 2 (July 2021 to December 2021)

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The term “experiential view” encompassing fantasies, feelings and fun associated with the consumption of goods and services was visibly introduced in marketing literature by Holbrook and Hirschman (1982). Since then, the concept has evolved from “consumption experience” to “customer experience” and recently to “brand experience”. This study has made an attempt to understand its relationship with brand loyalty. The importance of brand loyalty in ensuring a brand’s survival and growth is universally accepted. The other two variables- satisfaction and brand trust- have been included as the mediating variables in this study. A mediating variable is a variable that plays a causal intermediary role between an independent variable and a dependent variable. This paper covers the literature review and operationalisation of these four variables.

Measuring the Attitudes and Behavioural Dynamics of Consumers towards Online Shopping amidst Covid-19: Insights from Kolkata

Samuel S Mitra, Dr. Shivaji Banerjee, Peter Arockiam. A., Joseph K.

Volume 42, Issue 2 (July 2021 to December 2021)

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The past few years has witnessed the phenomena of “internet shopping” grow in leaps and bounds. The term “online shopping” has become a buzzword and an ever growing trend among consumers even in a developing country like India. In fact, the market potential for e-commerce has a huge reservoir as explored through a sneak-peek into the exponential expansion of key players existing in the e-commerce industry. Moreover, online shopping has prodigiously influenced the lives of the modern day consumers, who have been observed to have a penchant towards it. The present research endeavour is aimed to probe into the perceptions of consumers towards e-shopping in the context of “Technology Acceptance Model” (TAM). For this purpose, a survey among 363 respondents in the metropolitan setting of Kolkata has been conducted and their responses were recorded. “Structural Equation Modeling” (SEM) has been used to examine and analyze the model fits and hypothesis testing. The findings reveal positive perception among the surveyed consumers towards online shopping.

Is Diversification Enough? Lessons from the Agrarian Past of Bihar

Rakesh Ranjan

Volume 42, Issue 1 (January 2021 to June 2021)

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The lack of sustained growth in agricultural output and deepening of paddy-wheat cultivation cycle over many decades have given impetus to policy prescription towards crop diversification in Bihar. The recent rise in area under fruits and vegetables as well as sugarcane has encouraged those who are observing the state's prospects closely. This essay asks for abundant caution while acknowledging the need and benefits of crop diversification. It explores the colonial agrarian history of Bihar to find similar trends towards crop diversification that did not bring any improvement in the economic conditions of the cultivators involved. The past pattern suggests that the nature of land, labour, credit and produce market was such that it exploited Bihar peasantry to the benefits of those who controlled these crucial inputs as well as channels of international trade. This has important lessons for the policy makers when the path of crop diversification is taken. If the government is serious about increasing crop diversity to boost agricultural growth and incomes of cultivators, then the choice of the cultivators has to be tilted by institutional means.

Absence of Financial Sector in Modern Macroeconomics: Oversight or Overlook

Avinash Kumar Jha

Volume 42, Issue 1 (January 2021 to June 2021)

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The paper explores the question of why modern macroeconomics ignores the financial sector in its analysis despite Keynes's crucial work on the link between expectations in financial markets and the economy's ability to restore full employment through price mechanism. It explores the evolution of the concept of liquidity trap in macroeconomics text-books and indicates the dilution in it over the decades. Further, the theoretical necessity of efficient market hypothesis for modern microeconomics to ignore the financial sector is elaborated. Policy implications about the economies in general, and the financial sector in particular are highlighted.

Emerging Trends in Outward FDI and Preliminary Evidence on the Effects of Covid-19 on Outward FDI from India

Pooja Khanna

Volume 42, Issue 1 (January 2021 to June 2021)

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Investing overseas is a potential channel to access new distribution networks, enhance knowledge base and technology and improve competitiveness which can be crucial for a country's growth and development. (Dunning and Lundan, 2008). Last few decades have witnessed a growing trend of overseas investments by the developing countries, including India. This paper presents a trends analysis for outward FDI flows from India, using RBI database for the period 2007-2019. Since RBI provides a disaggregated monthly data, it is aggregated to yearly observations for the purpose of trends analysis. A sectoral and destination specific trends analysis brings out some important facts about Indian OFDI. Service sector dominates the Ooutward FDI flows from India and the increasing presence of primary sector is noteworthy. Emergence of destinations such as Singapore, UAE, Russia, Mozambique as compared to the earlier popular destinations such as U.S and U.K, is another significant finding of the paper. However, because of COVID-19, FDI outflows have been adversely affected. This paper highlights some emerging trends in FDI outflows, for Asian economies, followed by a detailed case study on changes in Indian overseas investment due to the global pandemic. The study includes a monthly, like for like, comparison of the overall Indian overseas investment. It also presents a disaggregated sector-wise and destination-specific analysis of the trends in Indian OFDI flows for 2019 and 2020, for the months of March-August. Trend analysis and calculations based on the data, show a fall in OFDI flows with services and its sub-sectors hit hardest by the pandemic, followed by the manufacturing sector. Primary sector reported a growth driven mainly by investments from ONGC Videsh Ltd. and Oil India Ltd. Pattern of OFDI flows patterns changed in favor of destinations like Mozambique, British Virgin Islands and South Korea in 2020.