Trade liberalization and productivity of Indian manufacturing firms

2019 ◽  
Vol 13 (1) ◽  
pp. 73-98 ◽  
Author(s):  
Bishwanath Goldar ◽  
Isha Chawla ◽  
Smruti Ranjan Behera
Keyword(s):  
Trade Liberalization ◽  
Fixed Effects ◽  
Value Added ◽  
Good Deal ◽  
Manufacturing Firms ◽  
Econometric Models ◽  
Fixed Effects Model ◽  
Firm Level ◽  
Content Type ◽  
The Impact

Purpose The purpose of this paper is to assess the impact of India’s trade liberalization during the late 1990s and 2000s on productivity of manufacturing firms and verify whether the productivity-enhancing impact of reductions in input tariffs was greater than that of output tariff cuts, as found in some earlier studies. Design/methodology/approach Firm-level (company-level) data drawn from Prowess database are used for the estimation of total factor productivity (TFP) at the firm level, done by using the Levinsohn–Petrin methodology. Econometric models are estimated to explain firm-level TFP. The explanatory variables used are output and input tariff rates and quantitative restrictions on imports at the industry level and firm characteristics such as firm size, export intensity and import intensity. Firm-level panel data for 2002-2010 or for a longer period 1998-2010 are used for the estimation of econometric models. Model estimation is done by applying the fixed-effects model and IV-2SLS, 3SLS estimators and EC2SLS estimators. Findings Trade liberalization had a significant positive effect on the productivity of Indian manufacturing firms. The lowering of output tariff had a greater beneficial impact on TFP of Indian manufacturing firms than the lowering of tariff on intermediate inputs. Originality/value Good deal of care has been taken in the measurement of output and inputs for the purpose of TFP measurement. Two alternative frameworks, gross output and value added, are used. This helps in making a better estimate of the impact of trade liberalization on TFP.

scholarly journals The Impact Of Good Corporate Governance To Manufacturing Firm’s Profitability And Firm’s Value

2016 ◽  
Vol 5 (2) ◽  
pp. 181-196 ◽  
Author(s):  
Johanes Sumarno ◽  
Sendy Widjaja ◽  
Subandriah Subandriah
Keyword(s):  
Corporate Governance ◽  
Fixed Effects ◽  
Negative Impact ◽  
Stock Exchange ◽  
Manufacturing Firms ◽  
Fixed Effects Model ◽  
Good Corporate Governance ◽  
Oecd Principles ◽  
Equitable Treatment ◽  
The Impact

This paper studied the behavior of management toward the implementation of Good Corporate Governance in Indonesia to determine whether it has any influence towards profitability and its implication to the Manufacturing Firms’ value publicly listed in Indonesian Stock Exchange. There were 41 corporations who met the criteria of the survey. The data were analyzed using Panel Regression with fixed effects Model. The empirical findings show that the implementation of Corporate Governance in Indonesia has a positive, significant and direct impact toward firms’ profitability and firms’ value. Corporate Governance principles based on OECD principles that have positive and significant impact to both profitability and Firms’ Valueis Rights of Shareholders, Role of Stakeholders, Responsibilities of the Board Commissioners and Board of Directors. The principles that have significance and negative impact towards corporate profitability and value, are: Equitable treatment of shareholders and Disclosure and Transparencies. The most significant principle influencing profitability and firms’ value is Disclosure and Transparencies. Profitability plays a greater role in influencing Manufacturing Firms’ value in Indonesia. DOI: 10.15408/sjie.v5i2.3542

The elephant in the room of mutual forbearance

2018 ◽  
Vol 11 (2) ◽  
pp. 257-279 ◽  
Author(s):  
Burak Cem Konduk
Keyword(s):  
Airline Industry ◽  
Fixed Effects ◽  
Research Question ◽  
Fixed Effects Model ◽  
Content Type ◽  
High Performing ◽  
The Us ◽  
Mutual Forbearance ◽  
Low Performance ◽  
The Impact

PurposeThe purpose of this paper is to explain how a multi-market firm develops the motivation to forbear from competition.Design/methodology/approachA two-way fixed effects model with Driscoll and Kraay standard errors investigates the research question with panel data collected from the US scheduled passenger airline industry.FindingsThe results demonstrate that although the interaction of multi-market contact with strategic similarity impairs a firm’s forbearance from competition, the same interaction promotes it as firm performance deteriorates, supporting the hypotheses.Research limitations/implicationsPerformance explains not only how forbearance emerges out of coincidental multi-market contact but also reconciles the mixed evidence for the impact of the two-way interaction between multi-market contact and strategic similarity on forbearance.Practical implicationsAntitrust authorities should pay more attention to low performing firms than to high performing firms in their investigations. Also, managers of multi-market firms should identify multi-market rivals with low performance as targets for the initiation of forbearance.Originality/valueThis study revises the mutual forbearance theory to align it with the accumulating empirical evidence that otherwise refutes its assumption and thereby improves theory’s descriptive and predictive power.

The impact of exporting on women's employment

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Begum Dikilitas ◽  
Burcu Fazlioglu ◽  
Basak Dalgic
Keyword(s):  
Manufacturing Firms ◽  
Female Employment ◽  
Women's Employment ◽  
Employment Rate ◽  
Women’S Employment ◽  
Firm Level ◽  
Content Type ◽  
Time Period ◽  
Employment Rates ◽  
The Impact

PurposeThis paper aims to examine the effect of exports on women's employment rate for Turkish manufacturing firms over a recent period of 2003–2015.Design/methodology/approachThe authors establish treatment models and use propensity score matching (PSM) techniques together with difference-in-difference methodology.FindingsThe results of the study indicate that starting to export increases women’s employment rate for manufacturing firms. Gains in female employment rates are observed for the firms operating in low and medium low technology intensive sectors, low-wage sectors as well as laborlabor-intensive goods exporting sectors.Originality/valueThe authors complement previous literature by utilizing a rich harmonized firm-level dataset that covers a large number of firms and a recent time period. The authors distinguish between several sub-samples of firms according to technology intensity of the sector in which they operate, wage level and factor intensity of exports and investigate whether or not women gain from trade in terms of employment opportunities.

Intellectual capital efficiency and market-based financial performance: Evidence from listed conglomerate companies

2021 ◽  
Vol 2 (2) ◽  
pp. 31-42
Author(s):  
Eniola Ayisat Sulaiman ◽  
Abubakar Sadiq Kasum ◽  
Wasiu Ajani Musa
Keyword(s):  
Financial Performance ◽  
Intellectual Capital ◽  
Fixed Effects ◽  
Value Added ◽  
Secondary Data ◽  
Lagrangian Multiplier ◽  
Fixed Effects Model ◽  
Analysis Technique ◽  
Capital Efficiency ◽  
The Impact

Having observed the rate at which dissimilarity occurs between market and book value, and management ignorance concerning the impact intellectual capital disclosure has on companies’ values spurred the interest to probe the association between the efficiency of value-added intellectual coefficient (VAIC) and market-based financial performance of listed Nigerian conglomerate companies. To accomplish the purpose of this study, secondary data were employed and extracted from annual audited reports of listed conglomerate companies in Nigeria from the period of 2010–2018. The data obtained were subjected to static panel data regression analysis technique. The random-effects model was adopted because the empirical result from Breusch and Pagan Lagrangian multiplier (BP-LM) and Hausman tests chose it over the fixed-effects model to produce better results. This study revealed that the value-added efficiency of capital employed (VACA), value-added efficiency of human capital (VAHU), and value-added efficiency of structural capital (STVA) are the drivers of intellectual capital in the conglomerate sector. This study concluded that elements of intellectual capital have a strong power on market-based financial performance. This study recommends that information on intellectual capital components should be reported in ways they deem fit by developing a model of intellectual capital disclosure that complies with the International Accounting Standard Board (IASB)

Lending relationships, credit ratings and bank loan spreads: evidence from Indonesian listed companies

2020 ◽  
Vol 16 (4) ◽  
pp. 455-479
Author(s):  
Yane Chandera ◽  
Lukas Setia-Atmaja
Keyword(s):  
Fixed Effects ◽  
Credit Ratings ◽  
Listed Companies ◽  
Bank Loan ◽  
Least Squares Regression ◽  
Firm Level ◽  
Content Type ◽  
Lending Relationships ◽  
Loan Spreads ◽  
The Impact

PurposeThis study examines the impact of firm-bank relationships on bank loan spreads and the mitigating role of firm credit ratings on that impact.Design/methodology/approachThe study sample consists of Indonesian publicly listed companies for the period 2006 to 2016; bank-loan data was extracted from the Loan Pricing Corporation Dealscan database. For the degree of firm-bank relationships, the data on each loan is manually computed, using five different methods taken from Bharath et al. (2011) and Fields et al. (2012). All of the regression analyses are controlled for the year fixed effects, heteroscedasticity, and firm-level clustering. To address the endogeneity issues, this study uses several methods, including partitioning the sample, running nearest-neighbour and propensity score matching tests, and using instrumental variables in two-staged least-squares regression models.FindingsIn line with relationship theory and in opposition to the hold-up argument, this study finds that lending relationships reduce bank loan spreads and that the impact is more noticeable among non-rated Indonesian firms. Specifically, each additional unit in the total number of years of a firm-bank relationship and the number of previous loan contracts with the same bank are associated with 7.34 and 9.15 basis-point decreases, respectively, in these loan spreads.Practical implicationsCorporations and banks should maintain close, long-term relationships to reduce the screening and monitoring costs of borrowing. Regulators should create public policies that encourage banks to put more emphasis on relationships in their lending practices, especially in relation to crisis-prone companies.Originality/valueTo the best of the authors’ knowledge, this is the first study to examine the impact of lending relationships on bank loan spreads in Indonesia. The study offers insights on banking relationships in emerging markets with concentrated banking industries, underdeveloped capital markets and prominent business-group affiliations.

scholarly journals The relationship between debt and a firm’s performance: the impact of institutional factors

2019 ◽  
Vol 45 (9) ◽  
pp. 1272-1291 ◽  
Author(s):  
Rosa Forte ◽  
José Miguel Tavares
Keyword(s):  
Fixed Effects ◽  
Negative Relationship ◽  
Research Area ◽  
Institutional Framework ◽  
Market Regulation ◽  
Fixed Effects Model ◽  
Content Type ◽  
Macroeconomic Variables ◽  
The Impact ◽  
The Relationship

Purpose The purpose of this paper is to contribute to the existing literature on the relationship between debt and firms’ performance, by focusing on the influence of the institutional framework on this relationship and on the role of macroeconomic variables in explaining performance. Design/methodology/approach The present work is based on a large sample of 48,840 manufacturing firms from nine European countries covering the 2008–2013 period and uses a fixed effects model. Findings Results show that the impact of debt on a firm’s performance depends on the measure of debt (short-term debt positively affects a firm’s performance, whereas long-term debt presents a negative relationship) and that the institutional framework is indeed affecting the relationship between debt and a firm’s performance: the positive effect of debt on a firm’s performance tends to be higher the greater the “efficiency of the legal system” and the greater the “credit market regulation.” Macroeconomic variables also play a key role in explaining performance. Originality/value Unlike most of the existing studies, which focus only on the relationship between debt and firms’ performance in a single country, the present work uses a sample of firms from nine countries with the purpose of filling a research gap and bringing new empirical evidence to this research area.

Firm-level agreements, employment strategies and temporary workers

2020 ◽  
Vol 42 (1) ◽  
pp. 194-212
Author(s):  
Saverio Minardi
Keyword(s):  
Fixed Effects ◽  
Selection Process ◽  
Temporary Employment ◽  
Least Square ◽  
Temporary Workers ◽  
Firm Level ◽  
Data Set ◽  
Content Type ◽  
Collective Agreements ◽  
The Impact

Purpose The purpose of this paper is to investigate the impact of two-tier firm-level collective agreements on firms’ propensity to use temporary employment, accounting for the process of self-selection of firms into different bargaining levels in the Italian context. It further examines which firm-level characteristics drive this process of selection. Design/methodology/approach The empirical analysis uses a panel data set of Italian firms for the years 2005, 2007, 2010 and 2015. Estimations are produced and compared through ordinary least square regression, random-effects and fixed-effects models. Findings Results show that enterprises adopting two-tier firm-level agreements (TTFA) are associated with lower levels of temporary workers. However, a longitudinal analysis suggests that introducing a TTFA does not impact firms’ propensity to employ temporary workers. This novel finding highlights the presence of a selection process based on firm-level time-constant characteristics. The paper argues that these characteristics refer to management orientation toward high-road rather than low-road employment strategies. Further evidence is brought in support of this claim, showing that firms’ propensity toward the provision of training for their labor force partially explain the process of selection. Originality/value The study is the first to analyze the impact of secondary-level collective agreements on firms’ reliance on temporary employment, offering new evidence on the causes of the expansion of temporary employment. It further highlights the relevance of employers’ strategies in shaping the impact of the bargaining structure.

Product diversification, business structure, and firm performance in Taiwanese property and liability insurance sector

2017 ◽  
Vol 18 (5) ◽  
pp. 486-499 ◽  
Author(s):  
Chen-Ying Lee
Keyword(s):  
Firm Performance ◽  
Financial Services ◽  
Fixed Effects ◽  
Ordinary Least Squares ◽  
Product Diversification ◽  
Least Squares Regression ◽  
Fixed Effects Model ◽  
Content Type ◽  
The Impact ◽  
Business Structure

Purpose The purpose of this study is to analyze product diversification, business structure and insurer performance with a comprehensive look at the property-liability (P/L) insurance operations. Design/methodology/approach Using a panel data, this study employs an ordinary least squares regression model, fixed effects model and random effects model to examine the impact of product diversification and business structure on the performance of P/L insurers. The study assesses insurer performance using both risk-adjusted return on assets and risk-adjusted return on equity. Findings The study finds that product diversification is significantly negatively related to the performance of P/L insurers. The results are consistent with the diversification discount theory. The empirical results reveal that business lines have significant impacts on firm performance, particularly on the lines of fire and marine insurances. Furthermore, the interaction between product diversification and firm size implies that product diversification significantly increases the performance of large-sized insurance firms. Originality/value The study provides some valuable insights into the effects of diversification and business structure on the performance of P/L insurers in a developing country. The study’s findings suggest that management of P/L insurers should clarify their objectives and carefully assess the company’s resources when dealing with product diversification and business structure. The results have practical implications for the financial services industry in Taiwan.

Female directors and risk-taking behavior of Indian firms

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Shreya Biswas
Keyword(s):  
Risk Taking ◽  
Fixed Effects ◽  
Critical Mass ◽  
Gender Diversity ◽  
Dynamic Panel Data ◽  
Fixed Effects Model ◽  
Firm Level ◽  
Content Type ◽  
Female Directors ◽  
Risk Taking Behavior

PurposeThis study examines whether female directorship on board is related to firm's risk-taking behavior in India.Design/methodology/approachThe study considers the top 500 listed companies in India during the period 2013 to 2018 for the analysis. The paper employs fixed effects as well as a dynamic panel data model to address the bias in the fixed effects model when the lagged risk outcome is included as an explanatory variable.FindingsThe study finds that the presence of female directors on board is unrelated to the firm's risk-outcomes and the risk-adjusted return earned by the shareholders. The results are in line with the tokenism theory of board diversity. Having a higher share of female independent directors is also unrelated to the risk-taking behavior of firms. The findings are in contrast to the critical mass theory and the agency theory of gender diversity. The study does not rule out the possibility of female directors' risk-preferences being similar to those of male directors.Practical implicationsThe findings suggest that regulations related to having independent female directors may not add value for the shareholders in the short run. The business case for such stringent regulations in India on the gender diversity of boards remains unclear.Originality/valueThis is the first study to analyze the relationship between gender diversity of boards and firm-level risk in India. Most of the studies have focused on gender diversity and firm performance in India. However, modern portfolio theory suggests that both risk and return are important as shareholders care about risk-adjusted returns.

Which food prices were more vulnerable to the COVID-19 blockade regulations in China? Comparison between perishable and storable vegetables

2022 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Yupeng Wang ◽  
Satoru Shimokawa
Keyword(s):  
Spatial Dependence ◽  
Fixed Effects ◽  
Design Methodology ◽  
Food Prices ◽  
Panel Var ◽  
Fixed Effects Model ◽  
Dynamic Panel ◽  
Data Set ◽  
Content Type ◽  
The Impact

PurposeThis paper aims to investigate how differently the COVID-19 blockade regulations influence the prices of perishable and storable foods. The authors focus on the cases of the 2020 blockade at Hubei province and the 2021 blockade at Shijiazhuang city in China, and the authors examine how the blockade influenced the prices of Chinese cabbages (perishable) and potatoes (storable) within and around the blockade area.Design/methodology/approachThe paper employs the fixed effects model, the panel VAR (PVAR) model, and the spatial dynamic panel (SPD) model to estimate the impacts of the blockade on the food prices. It constructs the unique data set of 3-day average prices of Chinese cabbages and potatoes at main wholesale markets in China during the two urban blockade periods from January 1 to April 8 in 2020 and from January 1 to March 1 in 2021.FindingsThe results from the SPD models indicate that the price of Chinese cabbages was more vulnerable and increased by 7.1–9.8% due to the two blockades while the price of potatoes increased by 1.2–6.1%. The blockades also significantly influenced the prices in the areas adjacent to the blockade area. The SPD results demonstrate that the impacts of the blockades would be overestimated if the spatial dependence is not controlled for in the fixed effects model and the PVAR model.Research limitations/implicationsBecause the research focuses on the cases in China, the results may lack generalizability. Further research for other countries is encouraged.Originality/valueThis paper demonstrates the importance of considering food types and spatial dependence in examining the impact of the COVID-19 blockades on food prices.

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