The Indian Economic Journal, Ahead of Print.
This article explores the socioeconomic factors of wheat growers’ participation intensity in contract farming (CF) under both public and private firms in Haryana. Using the primary survey data of 754 wheat growers collected from two districts of Haryana, the study finds that CF participation intensity is higher under government corporations than in private firms. The Tobit regression results show that similar variables determine the participation intensity under both types of firms. But the perception of agricultural profitability has different significant signs for public and private firms. This difference in profitability perception spawns from the different contracting nature of both types of firms. The government firms directly contact farmers, while private firms hire agents to communicate with farmers. In addition, government firms encourage marginal and small farmers to adopt CF, while private firms prefer medium to large farmers owning a minimum of five acres of cultivable land. Payment security is another reason for the intensity difference between types of firms. Therefore, the study calls for a policy framework to establish better institutional structure to strengthen CF inclusiveness, where both types of firms provide the scope for more extensive participation across the groups of farmers.JEL Codes: Q12, Q13, C01
A balancing act between accuracy and timeliness: Evidence from analyst forecasts in China
Abstract
This paper investigates the impact of teamwork on analysts' ability to balance accuracy and timeliness. Surprisingly, team analysts demonstrate a lower ability compared to individual analysts. This trade-off ability is even worse in diverse teams. Further, we find that Confucianism negatively affects this ability. However, this ability significantly improves when star analysts serve on the analyst team, or when analyst team members come from the province where the covered firm is headquartered, or when analyst team members graduate from the same college. Overall, these findings suggest that it is crucial to consider the two performance dimensions simultaneously.
The impact of the organisational structure of tax authorities on tax and accounting fraud
Abstract
Using tax centralisation reform enacted to eliminate decentralised tax authorities, we find firms have lower probabilities of tax and accounting fraud since its implementation. Our analysis shows the negative impact of the reform on tax and accounting fraud becomes stronger among firms with weaker tax enforcement, indicating that the reform plays a corporate governance role through strengthening tax enforcement. Additionally, we find this effect is stronger when firm-level governance is weaker and stronger in firms with higher agency costs. Finally, the reform effect is weaker among non-state-owned enterprises with political connections to the central government.
Agricultural Crisis, Farms Laws, and Farmers’ Protest: Reflection on its Rollback and Implication
The Indian Economic Journal, Volume 72, Issue 2, Page 207-219, March 2024.
Agriculture has been brought to the forefront of policymaking, parliamentary debate, and political discussions in recent history. India’s Parliament recently voted to scrap agricultural reform laws which came up as a huge victory for the farmers’ movement, who have been protesting for over a year for the rollback of the laws. This farmers’ movement created history at the national and international levels in the present times. The government had passed three farm laws to transform agriculture and increase farmer income without detailed consultations with all stakeholders. This led to protests by the farmer community by blocking roads and highways, calling an All-India Bandh, which attracted public attention and brought weight to the farmer issues, leading to achievement for the ‘Annadatas’ of the country. The article discusses the predicaments of the agriculture sector, the problems of the farmers, critical analysis of the three Farm laws, their implementation, implications and finally, its rollback. The reasons for this move have been examined from the political and economic angle with a reflection on its rollback for the future.JEL Codes: Q18, Q10, Q13, Q15
Agriculture has been brought to the forefront of policymaking, parliamentary debate, and political discussions in recent history. India’s Parliament recently voted to scrap agricultural reform laws which came up as a huge victory for the farmers’ movement, who have been protesting for over a year for the rollback of the laws. This farmers’ movement created history at the national and international levels in the present times. The government had passed three farm laws to transform agriculture and increase farmer income without detailed consultations with all stakeholders. This led to protests by the farmer community by blocking roads and highways, calling an All-India Bandh, which attracted public attention and brought weight to the farmer issues, leading to achievement for the ‘Annadatas’ of the country. The article discusses the predicaments of the agriculture sector, the problems of the farmers, critical analysis of the three Farm laws, their implementation, implications and finally, its rollback. The reasons for this move have been examined from the political and economic angle with a reflection on its rollback for the future.JEL Codes: Q18, Q10, Q13, Q15
COVID-19, Economic Package and Indian Stock Market: An Event Analysis
The Indian Economic Journal, Volume 72, Issue 2, Page 303-322, March 2024.
The present study is an attempt to analyse the behaviour of securities around the outbreak of the COVID-19 pandemic and the declaration of an economic package by the government of India. In this study, daily prices of securities constituting the BSE 100 index are considered as these securities are highly traded and their trading impact would immediately reflect on the index. To present a sector-specific analysis, the securities are further classified based on sectors and are analysed using the event study methodology. Average abnormal returns (AARs) and cumulative average abnormal returns (CAARs) for overall market and for each sector have been calculated and their significance have been tested using parametric T-statistics, standardised cross-sectional test and non-parametric sign test. Based on the analysis, the study concluded that it was not the pandemic but the actions towards controlling the pandemic that caused a negative impact on the Indian stock market. The economic package declared by the government of India to boost the economy also turned out to be futile and failed in achieving its objectives. Among the sectors, only the technology sector has been positively impacted by the pandemic. The outcome of the study would be beneficial to the trading community in identifying the sectors/securities that would act as hedging in the pandemic situations.JEL Codes: E44, G1, G14, G18
The present study is an attempt to analyse the behaviour of securities around the outbreak of the COVID-19 pandemic and the declaration of an economic package by the government of India. In this study, daily prices of securities constituting the BSE 100 index are considered as these securities are highly traded and their trading impact would immediately reflect on the index. To present a sector-specific analysis, the securities are further classified based on sectors and are analysed using the event study methodology. Average abnormal returns (AARs) and cumulative average abnormal returns (CAARs) for overall market and for each sector have been calculated and their significance have been tested using parametric T-statistics, standardised cross-sectional test and non-parametric sign test. Based on the analysis, the study concluded that it was not the pandemic but the actions towards controlling the pandemic that caused a negative impact on the Indian stock market. The economic package declared by the government of India to boost the economy also turned out to be futile and failed in achieving its objectives. Among the sectors, only the technology sector has been positively impacted by the pandemic. The outcome of the study would be beneficial to the trading community in identifying the sectors/securities that would act as hedging in the pandemic situations.JEL Codes: E44, G1, G14, G18
History of Economics in the Light of Meghnad Desai’s Poverty of Political Economy
The Indian Economic Journal, Volume 72, Issue 2, Page 389-400, March 2024.
The article discusses some of the major theoretical and practical matters that the discipline of Economics has been grappling with from the times of Adam Smith down to Keynes. The publication of Meghnad Desai’s Poverty of Political Economy turns out to be an occasion or inspiration to revisit these ideas—the article is organised as a review article of the book.JEL Codes: B0, B1, B2, B3
The article discusses some of the major theoretical and practical matters that the discipline of Economics has been grappling with from the times of Adam Smith down to Keynes. The publication of Meghnad Desai’s Poverty of Political Economy turns out to be an occasion or inspiration to revisit these ideas—the article is organised as a review article of the book.JEL Codes: B0, B1, B2, B3
Impact of Foreign Aid on Economic Growth of Ethiopia
The Indian Economic Journal, Ahead of Print.
This study examines the impact of foreign aid on growth in Ethiopia based on time series data from 1980 to 2019. This study uses Autoregressive distributed Lag and an Error Correction to determine the long- and short-run impacts of foreign aid on growth. The empirical results show that, in the long run, foreign aid has a negative and insignificant effect on real GDP growth. However, gross domestic savings, exports, and inflation exert positive and insignificant impacts on GDP growth. Furthermore, Human capital and gross consumption expenditure exert a positive and significant impact on GDP growth, and gross capital information has a negative and significant impact on GDP growth. Thus, Ethiopia’s national development policy should focus on the productive utilisation of domestic savings to increase GDP growth rather than depend on external capital inflow, which is uncertain even when donor countries face long recessions.JEL Codes: E1, E2, E3
This study examines the impact of foreign aid on growth in Ethiopia based on time series data from 1980 to 2019. This study uses Autoregressive distributed Lag and an Error Correction to determine the long- and short-run impacts of foreign aid on growth. The empirical results show that, in the long run, foreign aid has a negative and insignificant effect on real GDP growth. However, gross domestic savings, exports, and inflation exert positive and insignificant impacts on GDP growth. Furthermore, Human capital and gross consumption expenditure exert a positive and significant impact on GDP growth, and gross capital information has a negative and significant impact on GDP growth. Thus, Ethiopia’s national development policy should focus on the productive utilisation of domestic savings to increase GDP growth rather than depend on external capital inflow, which is uncertain even when donor countries face long recessions.JEL Codes: E1, E2, E3
When Buffett meets Bollinger: An integrated approach to fundamental and technical analysis
Abstract
Motivated by the implication of return extrapolation models that a joint consideration of past price changes and firm fundamentals could efficiently identify stock mispricing, we propose an integrated approach that combines fundamental and technical information. This integrated approach generates substantial economic gains, which are comparable to those of strategies double-sorted on characteristics related to high turnover and trading costs and state-of-the-art machine learning strategies in existing studies. The performance net of transaction costs is still attractive. Simple transaction cost mitigation approaches could further enhance the performance of the integrated approach by reducing portfolio turnover. Consistent with behavioural models, limits to arbitrage and information asymmetry play a significant role in explaining the super performance of this integrated approach.
Media abnormal tone and cross section of stock returns: Evidence from China
Abstract
This paper introduces an innovative methodology for extracting information from textual data to explain cross-sectional stock returns, addressing limitations of conventional media tone measures. We find firms exhibiting higher media abnormal tone yield lower future returns in the Chinese market, even when controlling for common risk factors. This effect is more pronounced among firms with low investment, low profitability, and high short-term reversal. We also find the negative premium generated by media abnormal tone results from mispricing, highlighting investor overreaction despite media's role in disseminating concurrent firm information. Furthermore, the tendency for media outlets to follow suit exacerbates investor overreaction.
The effect of corporate Twitter, Instagram and YouTube activity on investor attention and market liquidity
Abstract
Using daily-level data on corporate social media activity, we show that investor attention generally increases when firms post on Twitter, Instagram and YouTube and that the effect is stronger during earnings announcement periods. We find that stock market liquidity improves when firms post on social media, but the effects are the most consistent for Twitter. Finally, we document that when firms miss earnings, they post more on social media if the magnitude of the bad news is small but remain silent when the magnitude is large. This strategic behaviour is prevalent across all three social media platforms.