Testing of causality relationship between Indian and Australian mutual funds performance: standard vs customized benchmarks

Manjunath, B. R.; Raju, J. K.; Rehaman, M.

doi:10.21511/imfi.17(3).2020.18

Cited by 1 publication

(1 citation statement)

References 29 publications

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“…Some researchers, such as (Li, 2001), state that within a temporal causal framework, VECM can account for the dynamics of the relationship. Similarly, various other authors like Bengali (2021); (Manjunath and Rehaman, 2020;Chandio et al, 2020;Osiobe, 2020;Bagchi, 2014;Imamoglu, 2019) implemented the Engle and Granger causality test based on the VECM framework that reveals the reliability of VECM causality test.…”

Section: Literature Reviewmentioning

confidence: 98%

Accounts Receivable and Payable Interrelationships: Evidence from Indian Small Cap Companies

Mittal

Monika

2022

RIJBR

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The present study focuses on determining the key component between accounts receivable and accounts payable by estimating the causal relationship between trade credits offered and availed for the period 2011 to 2020 in Indian BSE small-cap manufacturing companies. The analysis is carried out by panel unit root and co-integration test, panel vector error correction model, and pair wise granger causality test. Test results of the paper showed that there is a one-way interaction between accounts receivable to accounts payable in the short term. This interaction indicates that accounts receivable derive accounts payable in terms of amount in the short run. In the long run, (a) in terms of amount, there is a one-way equilibrium connection between accounts receivable and payable, that indicates accounts payable is the dominant component and accounts receivable is the compromising component, and (b) in terms of duration, there is two-way equilibrium relationship between accounts receivable days and accounts payable days, so the researcher is unable to determine dominant component. The pair wise Granger causality result also confirmed the result of the VECM test. The study's findings are relevant to researchers in enhancing knowledge of accounts receivable and payable relationships. It will contribute to company policymakers in setting the trade and working capital policy by balancing the supply and demand for trade credit which helps increase profitability. Investors will get an idea of a company's financial position by getting information about the leading component between accounts receivable and accounts payable.

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