The Indian Economic Journal, Volume 71, Issue 5, Page 845-863, October 2023.
The present study empirically examines the bi-directional relationship between sustainability disclosures and earnings quality under mandatory sustainability disclosures regime for India, a developing country. It considers both the qualitative and quantitative measurements of sustainability disclosures. Earlier research only explored such relationships assuming a unidirectional approach, under voluntary sustainability disclosure setting with quantitative measurements of sustainability disclosures for developed countries. The study employs the generalised method of moments (GMM) approach on selected listed companies for the period 2013–2019. The result shows a negative bi-directional relationship between sustainability disclosures quality and earnings quality which also hold when tested with an alternate earnings quality measure. The result confirms that firms focusing on sustainability disclosures will also be manipulating earnings because of opportunistic perspective. Also, firms manage earnings to use sustainability disclosures as their cover to protect themselves. The study offers theoretical contribution by empirically corroborating the agency theory based managerial opportunism hypothesis. It extends and validates the managerial opportunism hypothesis in a novel context and under mandatory sustainability disclosures setting. The findings offer strong policy implications to Indian regulators and other stakeholders regarding the unintended consequence of mandatory sustainability disclosures.JEL Codes: Q50, Q56, M48
Core Infrastructure and Manufacturing Activity in the Indian States: Does the Income Group Matter?
The Indian Economic Journal, Volume 71, Issue 5, Page 895-911, October 2023.
Taking the data for 17 Indian states for the period running 1991–2017, the study investigates relationship between infrastructure and manufacturing value added at the overall as well as segregated levels to study the spatial differences. Preliminary tests of cross-section dependence point to the existence of dependence among the cross sections after which second-generation testing procedures are applied. Spatial differential impact of infrastructure on the performance of manufacturing activity is estimated using fixed/random effect modelling. The empirical results show that infrastructure index exerts positive and significant impact on the manufacturing performance with estimate of 0.20 for all states in India and 0.49 for high-income states. Similarly, individual components of infrastructure influence manufacturing activity differently. Road infrastructure is influencing manufacturing performance negatively in high-income states while it is positive for other states; teledensity exerts positive influence in case of middle-income states while the impact is negative in case of low-income states. Dumitrescu and Hurlin’s causality test shows bidirectional causality from infrastructure to manufacturing output.JEL Codes: D02, E62, H54, L94, L96
Taking the data for 17 Indian states for the period running 1991–2017, the study investigates relationship between infrastructure and manufacturing value added at the overall as well as segregated levels to study the spatial differences. Preliminary tests of cross-section dependence point to the existence of dependence among the cross sections after which second-generation testing procedures are applied. Spatial differential impact of infrastructure on the performance of manufacturing activity is estimated using fixed/random effect modelling. The empirical results show that infrastructure index exerts positive and significant impact on the manufacturing performance with estimate of 0.20 for all states in India and 0.49 for high-income states. Similarly, individual components of infrastructure influence manufacturing activity differently. Road infrastructure is influencing manufacturing performance negatively in high-income states while it is positive for other states; teledensity exerts positive influence in case of middle-income states while the impact is negative in case of low-income states. Dumitrescu and Hurlin’s causality test shows bidirectional causality from infrastructure to manufacturing output.JEL Codes: D02, E62, H54, L94, L96
Price Impact of Derivatives Listing and Delisting: Evidence from India
The Indian Economic Journal, Ahead of Print.
This article investigates the spot market’s short-term price reaction on derivatives listing and delisting in India. We comprehensively examine the derivatives listing and delisting with extended time-series data from 2001-2020. We employ event study methodology and find that stocks show positive price reactions on the inclusion, whereas, on the exclusion, stocks show adverse price reactions. In addition, we validate our findings by considering the announcement date and actual date as our event date. We also examine the cross-sectional drivers of cumulative abnormal returns. We find that the underlying liquidity and volatility are critical drivers of cumulative abnormal returns. We produce evidence that derivatives listing (delisting) around the event window significantly increases (decreases) the prices of its underlying. The study attempt to contribute to option listing literature by analyzing the firm-specific cross-sectional drivers of cumulative abnormal returns.JEL Codes: G11,G12,G14
This article investigates the spot market’s short-term price reaction on derivatives listing and delisting in India. We comprehensively examine the derivatives listing and delisting with extended time-series data from 2001-2020. We employ event study methodology and find that stocks show positive price reactions on the inclusion, whereas, on the exclusion, stocks show adverse price reactions. In addition, we validate our findings by considering the announcement date and actual date as our event date. We also examine the cross-sectional drivers of cumulative abnormal returns. We find that the underlying liquidity and volatility are critical drivers of cumulative abnormal returns. We produce evidence that derivatives listing (delisting) around the event window significantly increases (decreases) the prices of its underlying. The study attempt to contribute to option listing literature by analyzing the firm-specific cross-sectional drivers of cumulative abnormal returns.JEL Codes: G11,G12,G14
Revisiting Economic Growth and Steel Consumption: Evidence from India
The Indian Economic Journal, Ahead of Print.
The article analytically investigates the association between GDP growth and steel consumption in India from 2004–2005 to 2019–2020. We investigate the association of both long-term and short-term by employing the Granger causality test in the vector error correction model. The results showed one-way causality between economic growth to steel consumption both in the long and short run and concludes that over the period there is a unidirectional movement from economic development to steel consumption. So, as the economy progresses it has a direct impact on the steel industry. Finally, the study forecast the steel demand for the next decade and highlights the readiness of the steel industry to meet its demand and focus on better utilisation of its capacity.JEL Codes: C51, E2, E27
The article analytically investigates the association between GDP growth and steel consumption in India from 2004–2005 to 2019–2020. We investigate the association of both long-term and short-term by employing the Granger causality test in the vector error correction model. The results showed one-way causality between economic growth to steel consumption both in the long and short run and concludes that over the period there is a unidirectional movement from economic development to steel consumption. So, as the economy progresses it has a direct impact on the steel industry. Finally, the study forecast the steel demand for the next decade and highlights the readiness of the steel industry to meet its demand and focus on better utilisation of its capacity.JEL Codes: C51, E2, E27
Costs of Hospital Care for Strokes in India: A Scoping Review
The Indian Economic Journal, Volume 71, Issue 5, Page 864-877, October 2023.
The incidence of stroke in India is one of the largest worldwide. With this scoping review, we assessed the evidence on the costs of stroke, which is essential to evaluate whether stroke care interventions are cost-effective. We adopted a healthcare sector and broader societal perspective and searched electronic databases for records including stroke cost estimates (up to 2020). Following deduplication and screening of 2,510 records, we extracted the data (converted into 2020 Indian rupees [INR]) and assessed the quality of eight eligible studies. These studies, published between 2011 and 2020, covered the whole of India and specific localities and were: cost-of-illness studies (n = 3); economic evaluations (n = 2); cross-sectional costing study (n = 1); simulated costing study (n = 1); and policy/clinical review (n = 1). Among the extracted estimates, the mean total costs of stroke care per patient for the period up to six months post admission ranged from ₹19,428.86 in a government hospital in Punjab to ₹118,040.15 in a private tertiary care centre in Ludhiana. The median total out-of-pocket (OOP) payments for cardiovascular disease-related expenditures ranged from ₹18,148.88 to ₹68,464.39 across different income groups. Despite methodological limitations, the data from our scoping review will help in designing economic evaluations of stroke care interventions in India.JEL Codes: C18, C80, D61, I15, I19
The incidence of stroke in India is one of the largest worldwide. With this scoping review, we assessed the evidence on the costs of stroke, which is essential to evaluate whether stroke care interventions are cost-effective. We adopted a healthcare sector and broader societal perspective and searched electronic databases for records including stroke cost estimates (up to 2020). Following deduplication and screening of 2,510 records, we extracted the data (converted into 2020 Indian rupees [INR]) and assessed the quality of eight eligible studies. These studies, published between 2011 and 2020, covered the whole of India and specific localities and were: cost-of-illness studies (n = 3); economic evaluations (n = 2); cross-sectional costing study (n = 1); simulated costing study (n = 1); and policy/clinical review (n = 1). Among the extracted estimates, the mean total costs of stroke care per patient for the period up to six months post admission ranged from ₹19,428.86 in a government hospital in Punjab to ₹118,040.15 in a private tertiary care centre in Ludhiana. The median total out-of-pocket (OOP) payments for cardiovascular disease-related expenditures ranged from ₹18,148.88 to ₹68,464.39 across different income groups. Despite methodological limitations, the data from our scoping review will help in designing economic evaluations of stroke care interventions in India.JEL Codes: C18, C80, D61, I15, I19
Erratum
The Indian Economic Journal, Ahead of Print.