The purpose of the study is to examine the performance of Indian banking sector in terms of efficiency, returns to scale, and total factor productivity change. The technique of data envelopment analysis is applied due to its flexibility to incorporate multiple inputs and multiple outputs without any underlying assumption on the functional form. There is growing tendency of public sector banks operating under increasing returns to scale, implying that substantial gains could be obtained from altering scale via either internal growth or consolidation in the sector. In terms of productivity, the results show a positive change in both the sectors due to technological change, possibly as a result of adoption of latest technology and new business practices in post reform period. However, there is an evidence of shrink in the market and negative growth in productivity in both the sectors during the period of global financial crisis. The main contribution of the paper is to empirically provide the evidences to resolve the debate if the global financial crisis had any impact on the performance of banking sector in India.
PurposeAn amalgamation of Decision-Making Trial and Evaluation Laboratory (DEMATEL) and Analytical Network Process (ANP) has been performed to develop a decision-making framework for improving the overall performance of the microfinance institutions. A primary survey was conducted to collect real-time data from the heterogeneous stakeholders of microfinance institutions across India. The validation of the proposed framework is performed by comparing the results against the conventional method of Analytical Hierarchy Process (AHP).Design/methodology/approachThis study identifies various dimensions and indicators for measuring the performance of Indian microfinance institutions. Additionally, the ranking and prioritisation of the performance dimensions and indicators is obtained by considering the mutual interrelation between them.FindingsThe study indicates that there exists a significant dyadic relationship between financial performance and social performance for improving the overall performance of the microfinance institutions. Governance is found to unidirectionally influence both financial and social performance. Among all the considered dimensions, financial performance of a microfinance institution is the most critical dimension for improving the overall performance. The top five performance indicators of the Indian microfinance institutions are funding source, borrowing and overhead cost, size of the firm, end-use of the money and depth of outreach.Research limitations/implicationsThe study was conducted in the context of Indian microfinance institutions; hence the scope of generalisation of the results is limited. This research considers both subjective and objective aspect of the performance dimensions and indicators from the perspective of multiple stakeholders (i.e. firm, society and regulator). The integrated framework is expected to aid in improving overall performance of microfinance institutions by focusing on the most critical (high prioritised) performance indicators.Originality/valueAn integrated DEMATEL-ANP framework is used in the domain of microfinance to assess the performance dimensions. This study is unique in terms of analysing performance of microfinance institutions from the perspective of heterogeneous stakeholders.
This article examines the factors that influence the accrual-based earnings management (AM) and real earnings management (RM) in the Indian context. Different firm-specific parameters as determinants of AM and RM are examined using panel data for 268 listed Indian manufacturing firms for the period 2009–2013. To estimate the AM and RM, Modified Jones Model (Dechow, Sloan, & Sweeney, 1995) and Roychowdhury Model (2006, Journal of Accounting and Economics, 42(3), 335–370) are used, respectively. Findings based on these models indicate that the Indian firms indulge in both AM and RM. Firm-specific parameters namely growth opportunity, financial leverage, firm’s performance and business group affiliation positively affect both AM and RM, whereas firm’s size, institutional ownership and firm age affect negatively. However, accounting flexibility measured by the ratio of net operating assets and sales is only positively related to accrual-based earnings management. Overall, the study finds that firm’s growth opportunity, financial leverage, firm’s performance, institutional ownership, business group affiliation and firm’s age influence both AM and RM.
This article examines the relationship between accrual-based earnings management (AM) and real earnings management (RM) in the Indian context by considering 673 listed non-financial companies for the period 2009–2013. The article quantifies AM and RM and tests whether Indian companies choose substitute relationship over complementary relationship between AM and RM after factoring firm-specific parameters such as firm size, market-to-book ratio, leverage, accounting flexibility, return on asset (ROA), business group affiliation and absolute accruals. Modified Jones model (1991) and Roychowdhury model (2006) have been used for quantifying AM and RM, respectively. To model the relationship between AM and RM, two-stage least square (2 SLS) regressions method has been used. The results suggest that Indian companies undertake both AM and RM with a higher predisposition towards AM. The positive association between the two supports complementary relationship between two and indicates that Indian companies use AM and RM to garner greater benefit from earnings management.
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