PurposeThe outbreak of the coronavirus disease 2019 (COVID-19) pandemic is an unprecedented shock to the BRICS (Brazil, Russia, India, China, South Africa) economy and their financial markets have plummeted significantly due to it. This paper adds to the recent literature on contagion due to spillover by uniquely examining the presence of pairwise contagion or volatility transmissions in stock markets returns of India, Brazil, Russia, China and USA prior to and during COVID-19 pandemic period.Design/methodology/approachIn this study, the generalised autoregressive conditional heteroskedasticity (GARCH) by Bollerslev (1986) under diagonal parameterization is used to estimate multivariate GARCH framework also known as BEKK (Baba EngleKraft and Kroner) model on stock market returns of BRIC nations and the US.FindingsThe empirical results show that the model captures the volatility spillovers and display statistical significance for own past mean and volatility with both short- and long-run persistence effects. Own volatility spillovers (Heatwave phenomenon) have been found to be highest for the US, China and Brazil compared to Russia and India. The coefficients indicate persistence of volatility for each country in terms of its own past errors. The highest and long-term spillover effect is found between US and Russia. The results recommend that Russia is least vulnerable to outside shocks. Finally after examining the pairwise results, it is suggested that the BRIC countries stock indices have exhibited volatility spillover due to the COVID-19 pandemic.Research limitations/implicationsThe study may be extended to include other emerging market economies under a dynamic framework.Practical implicationsResearchers and policymakers may draw useful insights on cross-market interdependencies regarding the spillovers in BRIC countries' stock markets. It also helps design international portfolio diversification strategies and in constructing optimal portfolios during COVID and in a post-COVID world.Originality/valueCOVID-19 has been an improbable event in the history of the world which can have a large impact on the financial economies across the emerging countries. This event can be deemed to be informative enough to measure the co-movements of the equity markets amongst cross-country return series, which has not been investigated so far for BRIC nations.
The global COVID-19 pandemic has led to spawning norms in all quarters, including the corporate boardrooms. The transformation required in boards is unprecedented in its intensity to overcome the changing challenges in the global market. A conceptual note has been developed to understand the boardroom challenges and the requirement of corporate stewards to combat the situation of health crises. The article discusses the new boardroom challenges the organization have to face such as virtual boardroom, right board composition, dynamic risk assessment, continuity and resilience. The need of the hour for corporate is to have an effective and steward board to overcome the health and financial challenges. The article also intends to give suggestions to the companies to manage the pandemic situation with a right steward attitude. Their diligent work can lead to increase in profits, which could further satisfy the shareholders with higher returns.
The article throws light on the impact of the pandemic on the major funding industry for the country, that is, private equity (PE) firms. About 59% of the FDI comes via this route, and growth of major sectors is impacted by their investment. Last few years, there have been discussions about dry powder availability with the PE firms. This is the time to create opportunity in crisis for both the parties (the investors and the target firms). As seen during the 2008 crisis, many deals which materialized gave huge benefits to the investors. The article motivates the industry not to take a backseat and make the best out of the situation.
The Basel Committee for Banking and Supervision (BCBS) introduced two key liquidity ratios to strengthen the short- and long-term liquidity positions of the banks around the globe. These ratios were designed to achieve two key distinct objectives. Firstly, to encourage banks' short-term resilience to the liquidity risks by ensuring there are sufficient high-quality liquid assets to survive a significant stress which may last for 30 days. Calculation of this ratio is called as Liquidity Coverage Ratio (LCR). Secondly, to promote bank resilience over a longer time horizon, at least annually, by creating additional incentives for banks to fund their activities with more stable sources of funding. This led to creation of Net Stable Funding Ratio (NSFR). While these structural ratios are mostly quantitative, the underlying factors that are needed to calculate these ratios include qualitative factors as well. The paper analyzed the implementation of Basel III standards for the banking sector in the UAE. In particular, the timelines specified by the Central bank of the UAE and its implementation by the Domestic-Systemically Important Banks (D-SIBs) in the UAE was tracked by this paper. The study found a disconnect between the disclosure requirements by Basel III and disclosure made in the published annual financial statements of the banks. The study also discussed the extent of disclosures made by the D-SIBs and how relevant disclosures may improve the transparency of the liquidity risk management of the bank. JEL Classification Codes: E58, G32, G38.
This study aims to explore internal firm factors that enhance sustainability‐oriented product and process innovations. Formulated on resource‐based theories and the Porter hypothesis, it further investigates the impact of these innovations on the economic performance of firms. Adopting a quantitative research methodology, the study uses partial least squares structural equation modelling on data collected from 251 middle to senior management employees working in manufacturing‐based consumer goods firms. Dynamic capabilities, sustainable organisational innovations and smart technologies are concluded as significant factors that enhance sustainability‐oriented innovations. A strong positive impact of sustainability‐oriented innovations on organisation's economic performance is established, with green competitive advantage playing a strong mediating role and green image as a weak mediating variable. Interesting insights are gained in action‐identity‐image relationships. A strong positive relationship is established between sustainability‐oriented innovations and green organisational identity. Green organisational identity further promotes green image through green commitment. The study provides managers insights on internal factors that encourage sustainable innovations and harness right opportunities to ensure economic success. The interplay between action, identity, and image provides policymakers right tools to frame appropriate strategies to create sustainability orientation. The study has limitations as it is cross sectional and hence fails to capture the dynamics over time and it uses subjective measures.
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