Papers by Dr Santanukumar Ghosh
Intellectual capital and financial performance of Indian banks
Journal of Intellectual Capital, 2012
PurposeThe purpose of this study is to investigate empirically the relationship between intellect... more PurposeThe purpose of this study is to investigate empirically the relationship between intellectual capital and financial performance of 65 Indian banks for a period of ten years from 1999 to 2008.Design/methodology/approachReserve Bank of India's database and Annual reports, especially the profit and loss accounts and balance sheets of the banks for the relevant years have been used to obtain the data. Value added intellectual coefficient (VAIC™) method is applied for measuring the value based performance of banks. Return on assets (ROA) and return on equity (ROE) are used to measure the profitability and productivity of Indian banks, measured by assets turnover ratio (ATO). The intellectual capital (human capital and structural capital) and physical capital of selected banks have been analyzed and their impact on corporate performance has been measured using multiple regression technique.FindingsThe analysis indicates that the relationships between the performance of a bank&#...
Sustainability Practices in Agriculture and International Trade: A Study on Select Islamic Nations
Social Science Research Network, Mar 1, 2020
Intellectual Capital Reporting Trends in India: An Empirical Study on Selected Companies
International Journal of Financial Management, 2013
In the knowledge economy there has been increasing demands from stakeholder's side to provide... more In the knowledge economy there has been increasing demands from stakeholder's side to provide sufficient information about company's ability to create wealth. Today intellectual capital is considered as superior assets for wealth creation. In this study we empirically investigate the intellectual capital reporting trends of 30 Indian knowledge intensive companies. The sample companies are selected, for this study, from the Group-A category companies of the listed companies of Bombay Stock Exchange. We have employed 'content analysis' method to measure the frequency of intellectual capital reporting in the annual reports of sample companies over the three-year period starting from 2009 to 2011. The empirical results show that reporting of intellectual capital items is unevenly distributed and information about external capital items are reported mostly. However, an upward trend in IC reporting is found in this study.
The Relevance of Intellectual Capital Valuation: Indian Evidence
International Journal of Financial Management, 2013
Intellectual capital (IC) shows a significantly growing acceptance as a worthy topic of academic ... more Intellectual capital (IC) shows a significantly growing acceptance as a worthy topic of academic investigation and practical implication. The main objective of this study is to determine the monetary value of intellectual capital and to examine whether the joint explanatory power of intellectual capital (IC), book value (BV) and earnings (residual income based on GAAP) for stock price is superior to that of earnings and book value of Indian companies. Additionally, the study aims to investigate the impact of intellectual capital on corporate value creation. This study is conducted on 110 leading knowledge companies operating in India during the period 2007 to 2011. An appropriate method is to be applied for measuring the intellectual capital performance of the company. In our study we extend the Ohlson's (1995) discounted residual income method to rationally measure firm's value by considering intellectual capital (IC). Regression models are examined in order to test the hyp...
The Role of Intellectual Capital in Creating Value in Indian Companies
International Journal of Financial Management, 2012
Intellectual capital is becoming the pre-eminent resource for creating value and competitive adva... more Intellectual capital is becoming the pre-eminent resource for creating value and competitive advantage. The aim of this study is to investigate whether the performance of a company's intellectual capital can explain productivity and corporate fi nancial performance or not. This study is conducted on 75 listed companies operating in India for the period 2004 to 2009. Annual reports, especially the Profi taLoss account and balance sheet of the company have been used to obtain the data. Necessary data also collected from Capitaline Database. Value Added Intellectual Coeffi cient (VAICTM) method is applied for measuring the Intellectual Capital performance of the company. Corporate performance measures used in this analysis are (1) Profi tability and (2) productivity. The intellectual capital and physical capital of selected companies have been analyzed and their impact on corporate performance has been measured using multiple regression technique. Findings from the empirical analys...
The Association Between Market Liquidity at the Scrip Level and Accounting Variables: The Indian Evidence
This paper investigates empirically the relationship between stock liquidity at the scrip level a... more This paper investigates empirically the relationship between stock liquidity at the scrip level and some selected accounting variable. Taking Amivest Liquidity Ratio as a measure of stock liquidity present study explores a significant positive relationship between market liquidity and growth of assets, growth of sales and Profit Before Interest and Taxes. But no significant relationship is established between market liquidity and corporate liquidity and only in a few stray cases significant relation between leverage and market liquidity is reported. The results from the Principal Component Analysis confirm a positive relation between the joint effect of growth of assets, growth of sales and Profit Before Interest and Taxes with the market liquidity at the scrip level.
Market-timing Performance of the Open-ended Income and Growth Mutual Fund Schemes: An Empirical Study
International Journal of Financial Management, 2013
The present study seeks to examine the markettiming performance of the open-ended income and grow... more The present study seeks to examine the markettiming performance of the open-ended income and growth mutual fund schemes' managers in India over the period from January 2001 to December 2011. The data for the proposed study are obtained from the website of Association of Mutual Funds in India (AMFI). Here, Treynor and Mazuy model is used. However, the empirical findings bring out that the market-timing performances of both types of schemes are not statistically significant. It is also observed from the analysis that eight schemes are statistically significant. Consequently, the average market-timing performance is also unsatisfactory for the income (0.007) as well as growth (-0.095) schemes. But, the mean test reveals that they are approximately equal performers. On the whole, owing to the insignificant market-timing performance, the fund managers of both types of schemes have failed to earn abnormal rate of return by applying the strategy of market outguessing from the volatile ...
The present study hypothesizes that the firms which follow the Pecking Order Theory (POT) may con... more The present study hypothesizes that the firms which follow the Pecking Order Theory (POT) may consistently move towards the Market Timing Theory (MTT) with dynamic revisions. Here, we argue that the cost of asymmetric information related to the equity (or debt) financing reduces in the overvalued (or undervalued) equity market. In the absence of significant overvaluation or undervaluation, firms finance through internal equity. Hence, by applying a time varying "dynamic market timing measure", the study examines firms' market timing strategy to explain the behavior of the cost of asymmetric information. In the case of debt financing, the study confirms that the cost of asymmetric information involves dynamic revision in the short run, but the same disappears over the long run periods when firms tend to follow the MTT consistently. On external equity, the study results suggest that firms' successful market timing lacks persistency and does not happen consistently ov...
Is There Optimality in Firm's Capital Structure?: An Empirical Study
The paper reports that, when firms follow the Pecking Order Theory, a sub-optimality with the cos... more The paper reports that, when firms follow the Pecking Order Theory, a sub-optimality with the cost components of firms’ capital structure exists. The sub-optimality drives firms to follow the Trade-Off Theory to reach optimality concerning the cost components of capital structure. At higher Ltd/Eq. ratios firms follow the Pecking Order financing and subsequently change the capital structure due to the interplay of profitability, cost of financing and influence of financing on profitability.
Unifying Views on Corporate Capital Structure Dynamics: A Research Letter
The present paper considers the issue of corporate strategic financing choices from the dynamic v... more The present paper considers the issue of corporate strategic financing choices from the dynamic views, and it puts forward a unifying view, where the view logically argues that the issue of financing decision is a combined choice of the firms’ decision set of “time-state-focus”. The view theoretically argues that firms’ capital structure decisions are particularly of some short of reconciliations on the part of the firms between/amongst the propositions of the static trade-off (STO) theory, the pecking order (PO) theory, the dynamic trade-off (DTO) theory, and the market timing (MT) theory. The empirical observations also support the said theoretical views and thereby confirm the firms’ dynamic behaviors and provide robust supports in favor of the dynamic unifying view of firms’ financing choices.
Macroeconomic Variables and Firms’ Adjustment-Speed in Capital Structure Choice: Indian Evidence
In examining the adjustment speed in the dynamic capital structure choice of the firms, the prese... more In examining the adjustment speed in the dynamic capital structure choice of the firms, the present study utilizes a dynamic Partial Adjustment Model (PAM), and extends the work of Drobetz and Wanzenried (2006). The study explores whether firms’ recapitalization policy allows dynamic adjustments in leverage revision through two decision variables - the target leverage and the adjustment speed. The study finds that firms’ dynamic recapitalization is subject to changes in the firm-specific as well as macroeconomic variables, where both the target leverage and the adjustment speed are determined by firms’ reactive and/or proactive adjustment behaviors.
Dynamics of Corporate Capital Structure Choices: A Re-Conciliatory View and Tests
Purpose:- In contrast to a 'point of view' theory, a unifying view fits different view po... more Purpose:- In contrast to a 'point of view' theory, a unifying view fits different view points in firms’ financing choices. It requires reconciliation of the points of views. We work on that end and examine the same with Indian firms’ data empirically.Methods:- Given that CFOs show dynamic changes in 'points of view' and shift from one track to other, we propose that in dynamic recapitalization, high (low)-value firms approach towards the Dynamic Trade-Off (DTO)-track form debt-revisions in the Static Trade-Off (STO)-track and Pecking Order (PO)-track. We define debt-revisions in STO, PO and DTO-track. In dynamic panel data of cubic specification, STO and PO debt-revisions are regressed on DTO debt-revisions, on equity issues, and on their joint effects. The proxy variables are defined and tests on robustness are performed.Results:- The both debt-revisions in STO and PO-track of high-value firms contribute dynamic effects on DTO debt-revisions in separating equilibriu...
Time Diversification and Risk Management: A Probabilistic Approach
This study reveals that time diversification is not a strategy for risk management at all. At the... more This study reveals that time diversification is not a strategy for risk management at all. At the end of the longer time horizons, age-old experienced gainers discover that they hold only a basket of inferior stocks or a few performing stocks or both. This paper contends that time cannot make a below-performing stock to be a performing one only by way of aging with time horizons. In an efficient market, with expanding holding periods only, one cannot improve the portfolio size over the average portfolio size for the actual and potential probable losses as well.
Indian software and pharmaceutical sector IC and financial performance
Journal of Intellectual Capital, 2009
PurposeThis paper seeks to estimate and analyze the relationship between intellectual capital and... more PurposeThis paper seeks to estimate and analyze the relationship between intellectual capital and corporate conventional financial performance measures of Indian software and pharmaceutical companies for a period of five years from 2002 to 2006.Design/methodology/approachAnnual reports, especially the profit and loss accounts and balance sheets of the selected companies for the relevant years have been used to obtain the data. International literatures on intellectual capital with specific reference to measurement tools and techniques have been reviewed. Value Added Intellectual CoefficientTM (VAIC) method is applied for measuring the value based performance of the companies. Corporate conventional performance financial measures used in this analysis are: profitability; productivity; and market valuation. It is an empirical study using multiple regression analysis for the data analysis. The intellectual capital (human capital and structural capital) and physical capital of the arbit...
Association Between Stock Market Liquidity and Some Selected on Indian Stock Market Macroeconomic Variables: A Case Study
The IUP Journal of Financial Economics, 2008
This paper attempts to empirically study the relationship between Index of Industrial Production,... more This paper attempts to empirically study the relationship between Index of Industrial Production, Consumer Price Index, Exchange Rate of Indian Rupee against the US Dollar, Gold price and Money Supply with the Stock Market Liquidity. Using two widely used proxies to ...
Dynamics of Corporate Capital Structure Decisions: A Critical Survey of the Literature
SSRN Electronic Journal, 2013
ABSTRACT The researchers’ understandings on the relevance of corporate capital structure decision... more ABSTRACT The researchers’ understandings on the relevance of corporate capital structure decisions have been shifted from the examination of the irrelevance argument to the relevance argument and its different facets. In the literature, the modern theories have overemphasized on the different “points of view” while their specific facets have their specific roles to play only. The researchers have deviated far away from one another and could not explain a lot. The quest for a unifying theoretical view whether possible or not has remained unaddressed as yet. In a dynamic time framework model, a firm’s financing decision may have financing flexibility in shifting its decision frameworks from one “point of view” framework to the other. Corporate financing decisions should include a super-set of decision variables rather than the segregated sub-sets simply. This paper shares the opinion that this direction of research may justify the theoretical and empirical gaps as well in the literature of the Corporate Finance.
The Bilateral Association Between Discretionary Environmental Disclosure Quality and Economic Performance: An Asian Perspective
This paper investigates the two-way association between economic performance and quality of discr... more This paper investigates the two-way association between economic performance and quality of discretionary disclosure of sustainable environmental practices. The study focuses on seven Asian countries, namely, India, Japan, China, South Korea, Malaysia, Indonesia and Israel. The result of primary research design suggests that economic performance and discretionary environmental disclosure quality are not simultaneously related and thus are not endogenous. Accepting
A Study on Effectiveness of Investment in Intellectual Capital of Indian Knowledge Companies
International Journal of Business Analytics and Intelligence, 2015
Intellectual capital (IC) is non-monetary assets or resources without physical substances which a... more Intellectual capital (IC) is non-monetary assets or resources without physical substances which are underlying factors of a firm’s value creation process. Knowledge based companies mainly depend upon these type of assets for their value creation and competitive advantage. The present study makes an attempt to examine efficiency and effectiveness of investment in intellectual capital of 100 Indian knowledge companies during the period 2002 to 2011. In other words, this study examines the efficiency of intellectual capital management with regard to target level of Indian knowledge companies. For the purpose of the study, 100 Indian knowledgeintensive companies comprising 32 software companies, 32 pharmaceuticals companies, and 36 banking and finance companies are selected on the basis of highest market capitalisation. For measuring the efficiency of intellectual capital Pulic’s VAICTM (value added intellectual coefficient) is applied. This study examines, by applying partial adjustment (PAM) model, how fast the sample companies are improving the respective level of intellectual capital efficiency with respect to a target efficiency level. The study results also indicate that the speed of achieving that target level of efficiency of sample companies is moderate. From the beta values of regression results it is also observed that IT companies are more efficient in intellectual capital management with regard to target level as compared to banks and pharmaceutical companies. This is the first study in the IC literature that applies partial adjustment model to examine the speed of achieving target efficiency level by an individual knowledge company. However, this study confined to knowledge companies only.
Use of standard in the international trade dates can be back to the industrial revolution. Its ma... more Use of standard in the international trade dates can be back to the industrial revolution. Its main purpose was to regulate weights, quality, voltage and other measurement related issues. Since 1970s use of standards to capture the social values relating to environment, labour human rights etc a new set of standards came into being. Proliferation of private voluntary sustainability standards (VSS) is a comparatively new phenomenon. Evidences of positive impact of using these standards are available. Also, there are apprehensions among the researchers about their use as barriers to trade. Present study makes a modest attempt to explore such possibility besides identifying national sustainability behavior using a sample of 56 Islamic states. Results of this study provide evidences of concentration of countries at a range of low to medium level of practices. Possibility of using such practices as barrier to trade is found to be remote. However, case specific study may provide actual position in this regard.
Use of standard in the international trade dates can be back to the industrial revolution. Its ma... more Use of standard in the international trade dates can be back to the industrial revolution. Its main purpose was to regulate weights, quality, voltage and other measurement related issues. Since 1970s use of standards to capture the social values relating to environment, labour human rights etc a new set of standards came into being. Proliferation of private voluntary sustainability standards (VSS) is a comparatively new phenomenon. Evidences of positive impact of using these standards are available. Also, there are apprehensions among the researchers about their use as barriers to trade. Present study makes a modest attempt to explore such possibility besides identifying national sustainability behavior using a sample of 56 Islamic states. Results of this study provide evidences of concentration of countries at a range of low to medium level of practices. Possibility of using such practices as barrier to trade is found to be remote. However, case specific study may provide actual position in this regard.