Firms’ capital structure dynamics and ownership structure are two extensively studied subjects of research in corporate finance in recent years. This study combines these two branches of research and examines the impact of firms’ ownership structure on capital structure dynamics. More specifically, it examines the asymmetry in adjustment speed between group and stand-alone firms. The study uses data of 1,415 listed Indian manufacturing firms over the period of 2005–2013 (9 years) from ‘Capitaline Plus’ database. It specifies a partial adjustment model and uses the generalized method of moments (GMM) technique to estimate the adjustment speed. The results show that Indian manufacturing firms close about 30 percent of their leverage gap every year. For group firms, the annual speed of adjustment is about 20–29 percent whereas for stand-alone firms, it is about 38–41 percent. Lesser potential benefits or higher costs of adjustments may be responsible for slower adjustment speed of group firms than their stand-alone counterparts.

Purpose This paper studies the relationship between characteristics of firms’ and their propensity to maintain zero-leverage (ZL). Its second objective is to examine the impact of macroeconomic conditions on firms’ ZL policy. Finally, the purpose of this paper is to explore the underlying motives behind eschewing debt for constrained and unconstrained firms. Design/methodology/approach The paper uses data of 2001 non-financial and non-utility listed Indian firms over a period of 2005-2013 from Capitaline database. Size quintiles and dividend payment status have been used to differentiate between constrained and unconstrained firms. It uses t-test and logistic regression to draw inferences. Findings In general, firms pursuing ZL policy are financially constrained. However, there is a sub-section of ZL firms found unconstrained with high profitability. They appear to be “self-sufficient” to meet their financing requirements. Finally, macroeconomic conditions are counter cyclically related to firms’ ZL policy. Research limitations/implications The impact of corporate governance practices on firms’ ZL policy could not be examined due to data inadequacy. However, financial constraints and the presence of ZL firms come out as important factors to be paid special attention for future empirical works on capital structure. Practical implications The findings can be useful for financial managers in designing capital structure on the basis of their financial position. Originality/value Previous studies on ZL phenomenon are based on developed countries. The findings of previous studies conducted for developed countries get revalidated for the first time in the context of an emerging economy like India.

PurposeThe purpose of this study is to investigate the impact of Internet banking intensity on banks' profitability performance. It also examines the deferential impact of Internet banking intensity on the profitability performance of public and private sector banks.Design/methodology/approachThe study uses data of 67 commercial banks operating in India over 9 years from 2011–2012 to 2019–2020. The volume and value of Internet banking are used as two proxies for Internet banking intensity. Return on assets and return on equity are considered measures of banks' profitability performances. The system GMM model and the three-stage least square (3SLS) model are used to investigate the impact of Internet banking intensity on performance.FindingsThe results indicate that the volume and value of Internet banking increase the overall profitability of the banks. The results further reveal that the positive impact of Internet banking on performance is higher in the case of public sector banks which possibly indicates that there are economies of scale of operation.Practical implicationsThe results suggest that banks and policymakers should strive to increase internet banking scope to improve performance. Private banks should focus on increasing their customer base to achieve economies of scale and public banks should work on the efficient utilization of resources.Originality/valuePrior studies investigated the impact of Internet banking adoption on the performance of banks. This study attempted to examine the impact of Internet banking intensity on the profitability performance of banks in the context of an emerging economy.

This study examines the asymmetries in capital structure adjustment speed depending on firms' affiliation to business groups. Using partial adjustment framework on a dataset of 2001 listed Indian nonfinancial firms over the period of 2005-2013, it was found that Indian firms annually adjusted about 37 percent of their deviation from target leverage. Groups firms, in general, adjust their leverage ratio slower than the stand-alone firms, suggesting lesser net benefits of adjustment for the former than the latter. The results are persistent irrespective of firms' extent of deviation from their target leverage. However, the net benefits of adjustment and consequently the adjustment speed for both the groups of firms, irrespective of their extent of deviation from target leverage, seem to be alike, when they are over-levered and lower for group firms than the stand-alone firms, when they are under-levered. These findings indicate that both group and stand-alone firms face identical threats, when they are overlevered, whereas group firms possibly have alternative arrangements to reduce the owner-manager agency conflicts and tax liability, when they are under-levered. These findings are expected to prove helpful for financial managers in designing their capital structure based on ownership structure, and the nature and extent of deviation from the target leverage.

Transformation of non-government organizations (NGOs) to shareholder-owned microfinance institutions (MFIs) is an on-going debate in the field of microfinance research. Institutionalists support the transformation, whereas welfarists argue that NGOs are better conduits in serving poor clients. Prior studies on the impact of legal status of MFIs on their performance document mixed results. This study empirically investigates the extent to which the transformation is justified by examining the impact of legal status on the performance of MFIs in India. Using both univariate ( t-test and rank-sum test) and multivariate (random effect model) regression analysis on a dataset of 57 MFIs over the period of six years from 2008–2009 to 2013–2014, the study finds that the NGOs have better financial and sustainability performance than non-banking financial companies (NBFCs), but with respect to social performance both are indistinguishable. Further, the former has lesser costs of operation and better portfolio quality than the latter. Therefore, NGOs outperform NBFCs with respect to all dimensions of performance except for social performance where both are equally efficient. In conclusion, the transformation of NGOs to NBFCs may not improve the performance of Indian MFIs. These findings are expected to have substantial practical implications for managers of MFIs and for policymakers in framing policies for Indian MFIs.