Using a sample of Indian firms, we study the determinants of corporate cash holdings in an emerging economy. We study the excess and deficit cash holdings and assess the impact of leverage, accrual quality and working capital accruals on cash holdings. We find that after controlling for growth and size, leverage depends upon whether the firm holds excess or deficit cash. Levered firms with high profitability (measured via return on equity—ROE) hold less cash as compared to firms holding less than desired cash even if the profitability is high, and ample growth opportunities are available. We also find that while operating profit has no significant impact on cash holdings, volatility of sales does have a positive and significant impact. Firms having ready access to capital market (proxied by size and amount of leverage) are less likely to hold cash. Therefore, we argue that such firms can focus on value-generating activities without having to worry about liquidity. At the same time, smaller firms with good profitability (measured as return to equity) may also hold less cash as presented in this study.
India, has traditionally been involved in various corporate socially responsible (CSR) activities. This paper presents an empirical analysis of CSR activities of some selected public and private organization in India. The key objective of this analysis is to review the companies' CSR investment in sustainability, disclosure, governance, and CSR stakeholders. The Hypotheses development explains the positive significant relationship between CSR and firm performance. Then the methodology section explains sample selection and data source. Using these data, the CSR practices in selected public and private companies are evaluated based on the Global Reporting Initiative guidelines, and a comparative study of the impact of CSR practices on companies' profitability is conducted. The study also focuses on how CSR influences these companies' gross margins, as well as the correlation between environmental concerns and return on investment. The result of this study are appropriate for India's present scenario demonstrating that all companies are conducting CSR operations, but there is a substantial difference in the CSR disclosure practices of the selected firms. The private companies in India invests more in CSR but spend less on the environmental aspects whereas the public companies invest less in CSR but almost spend their entire CSR expenditure on the social and environmental aspects.
This article examines the level of cointegration of the weekly returns of Bombay Stock Exchange (BSE), the representative index of India, with those of other major Asian markets of China (Shanghai), Hong Kong (Hangseng), Japan (Nikkei) and Taiwan using the vector autoregression (VAR) for long-term dependencies and copulas for tail dependencies. A linear relationship is observed among all these markets, but the upper and lower tail dependencies of the BSE with Nikkei and Hangseng are found to be much stronger. The Clayton copula was used to study the lower tail dependency and the Gumbel copula for the upper tail dependencies of the returns. These results will be helpful for international portfolio diversification and the investors may find India, Japan and Hong Kong markets attractive for such diversifications. In addition, the GARCH(1, 1) methodology was also employed for studying the long-term variances of each of the market and it is observed that the weekly volatility of Nikkei is much higher as compared to other markets, while that of the BSE is moderate. Apart from this, all these markets show excess kurtosis, pointing towards heavy-tailedness of the return series apart from the non-normality. The VAR results show that BSE weekly returns are affected by up to two lags of the Hong Kong stock market (HANG). At the same time, the NIKKEI and the SHANG are affected by up to 1 week and 2 week lags of the BSE, respectively.
PurposeThe purpose of this study is to provide a new way to optimize a portfolio and to show that combining the Hurst exponent and wavelet analysis may help to increase portfolio returns.Design/methodology/approachThe authors use the Hurst exponent and wavelet analysis to study the long-term dependencies between sovereign bonds and sectoral indices of India. The authors further construct and evaluate the performance of three portfolios constructed on the basis of Hurst standard deviation (SD) – global minimum variance (GMV), most diversified portfolio (MDP) and equal risk contribution (ERC).FindingsThe authors find that an ERC portfolio generates positive superior return as compared other two. Since our sample includes periods of two crisis – post-2007 financial crisis and the ongoing pandemic, this study reveals that combining government bond with equities and gold provides a higher returns when the portfolios are constructed using the risk exposures of each asset in the overall portfolio risk.Practical implicationsThe findings provide guidance to portfolio managers by helping them to select assets using the Hurst approach and wavelet analysis thereby increasing the portfolio returns.Originality/valueIn this study, the authors use a combination of Hurst exponent and wavelet analysis to understand the long-term dependencies among various assets and provide a new methodology to optimize a portfolio. As far as the authors’ knowledge, no study in the past has attempted to provide a joint framework for portfolio optimization and therefore this study is the first to apply this methodology.
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