https://hal.archives-ouvertes.fr/hal-01878923/document

A six-factor asset pricing model

The recent spate of large cross-border acquisitions e.g. Tata Steel-Corus, Hindalco-Novelis, and Tata Motors-Jaguar/Land Rover, among others and Greenfield investments by Indian companies have helped in focusing attention on the emergence of new corporate players on the global scene. Indias emergence as a source of FDI outflows is impressive for its level of development. It is argued that the destinations, sectoral composition, motivations, and entry strategies of Indian investments have been changing with magnitudes. This paper examines the sources of Indian companies ownership advantages and trends, patterns and implications. It has been argued that the source of their ownership or competitive advantage lies in their accumulation of skills for managing large multi-location operations across diverse cultures in India and in their ability to deliver value for money with their frugal engineering skills honed up while catering to the largerpart of income pyramid in India.

Internationalization of Indian Enterprises : Patterns, Strategies, Ownership Advantages and Implications

Does foreign direct investment crowd in or crowd out private domestic investment in China? The effect of entry mode

Modeling the impact of service innovation for small and medium enterprises: A system dynamics approach

Purpose The present study focuses on two basic determinants of company innovation, namely quality practices of top management and process quality management. The purpose of the study is to explore the impact of these determinants on product and process innovation. Determining the impact of these dimensions of innovation on the market performance of a company is also an aim of the present study. Design/methodology/approach A research study was carried out on a sample of 433 Greek manufacturing and service companies. Data was obtained through a structured questionnaire from the Chief Executive Officers of the companies. Exploratory and Confirmatory Factor Analysis is applied to extract and validate all the latent factors considered in the suggested model, while their relationships are determined through Structural Equation Modelling. Findings The analysis of the empirical data shows that both the dimensions of company innovation examined in the present study (product and process innovation) are positively i...

Determinants of company innovation and market performance

Purpose – The purpose of this paper is to investigate the stability of the long‐run relationships between emerging (India, China, South Korea, and Taiwan) and developed stock markets (USA and Japan). The study aims at adding to the literature on market integration by investigating the hypothesis that the Asian emerging stock markets are increasingly converging with the US stock market over time.Design/methodology/approach – The authors use time varying cointegration tests (rolling and recursive cointegration) which allow for time variation in the underlying data generating process (possible structural breaks in the long‐run relationships). Ten year index data from mid 1998 to 2008 of the respective stock markets have been used for this study.Findings – Empirical findings support the presence of one long‐run relationship (cointegration vector) between emerging and developed stock markets. Both domestic and external forces affect stock market behavior, leading to long‐run equilibrium but the individual Asia...

The stability of long‐run relationships

Purpose




This paper aims to identify the dimensions of a firm’s service innovation competence. This paper also aims to establish the relationship between a firm’s service innovation competence dimensions and customer-oriented service innovation configurations and customer adoption. This study probes the supply side of service innovation to assess the key drivers or capabilities that influence the service innovation process at the firm level.




Design/methodology/approach




This study uses the triangulation method using existing theoretical concept supplemented by 18 in-depth interviews of senior level managers from service firms from three sectors – hospitality, mobile telecommunication services and financial services. The interview findings were supplemented by 12 service innovation case studies (four from each sector). Content analysis of in-depth interviews was performed using three raters, and inter-rater reliability was tested. Case studies were categorized in terms of the strength of the innovation competence dimension observed.




Findings




Based on the content analysis of the interviews and categorization of case study observations, six distinct dimensions of the firm’s service innovation competence were identified. Four attributes of each dimension were also identified. Based on the interview insights and case observations, seven propositions are suggested, and a conceptual framework is presented to establish the relationship between the firm’s service innovation competence dimensions and service innovation configurations and customer adoption.




Research limitations/implications




This study was conducted in the Indian context and remains to be tested using quantitative research. Therefore, researchers are encouraged to test the proposed framework in a different geographical context to ascertain its validity.




Practical implications




The conceptual framework presented in the paper may help managers of service firms in building innovation capabilities that are relevant to development of customer-oriented innovations. This would lead to better customer adoption of their new services.




Originality/value




This paper fills an important knowledge gap regarding the dimensions of a critical supply-side component of service innovation, that is, innovation competence. Clear identification of competence dimensions and their relationship with customer adoption extends the current knowledge on service innovation.

The role of a firm’s innovation competence on customer adoption of service innovation

Purpose – The purpose of this paper is to examine the short‐term stock market interactions between US and six major Asian markets – China, India, Hong Kong, Singapore, South Korea and Taiwan. These six economies along with Japan and Australia have the largest stock exchanges in the Asia‐Pacific region. The importance of the US market to the Asian economies is the prime motivation for a quantitative assessment of its role in this region. The objective of this study is to measure the dynamic stock market interdependence of US and Asian newly industrialized economies (NIEs) (Hong Kong, Singapore, South Korea and Taiwan) and emerging market economies (EMEs) (China and India) post Asian crisis of 1997 and also to capture the market interactions during the sub‐prime crisis.Design/methodology/approach – The study has employed Granger causality tests and generalized forecast error variance decomposition (FEVD) analysis to analyze the fluctuations in and the extent of short‐term interdependence between the US and ...

Dynamic interdependence between US and Asian markets: an empirical study

This research work empirically investigates the differences in stock price reaction of target and acquiring companies due to merger announcements. The role of insider information before merger announcements is also empirically tested and explained to be the cause for observed pre-announcement price run-ups. The investigation has been carried out using traditional event study methodology. Various event windows have been considered and compared to find out the period where the price run-up initiates. The post-merger price variations have also been studied. This analysis is suggestive of an upward trend in cumulative abnormal returns for companies in the pre-announcement period which in turn is indicative of insider information or anticipation. In addition, the evidence also suggests that around the announcement period the returns for the acquiring companies are higher than those for the target companies. In the post amalgamation period there is a downward trend in the cumulative returns implying a negative result of the merger.

Stock price reaction to merger announcements: an empirical note on Indian markets

IntroductionThe changes in abnormal returns of a security around event announcement may be due to event-induced, firm-specific or event-related factors. There are a host of studies that have looked into factors that influence stock returns for seasoned issue announcements (Asquith and Mullins, 1986; Mikkelson and Partch, 1986; and Kalay and Shimrat, 1987). However, Barclay et al. (1990) have found that there exists a relationship between announcement effect on abnormal returns and the issuing firms' information asymmetry, profitability, growth, and the issue characteristics. An analysis of factors affecting abnormal returns around the announcement of new equity issue is important for the following reasons: (1) unrecorded goodwill may be reflected in the stock price which is not captured by the event itself; (2) managers have superior information about investment projects compared to investors; and (3) the issuing firm's current financial structure and the impact of new equity issued on its financial situation are also important factors considered by investors in their valuation of equity offerings. Though empirical work has focused on examining the significance of the change in abnormal returns, studies exploring the extent of influence of firm-specific or event-related factors on abnormal returns are limited.The literature shows that issue size has a mixed impact on the firm's abnormal returns (Hess and Bhagat, 1986; Abhayankar and Dunning, 1999; Marsden, 2000; Bigelli, 2002; Kato and Tsay, 2002; Tan et al., 2002; and Wu et al., 2005). A positive relationship between pre- market condition and a firm's abnormal returns has been documented by Choe et al. (1993), Tsangarakis (1996) and Tan et al. (2002). Different firm characteristics have a significant effect on the firm's abnormal returns (Balachandran et al, 2005).Measurement of Variables Affecting Abnormal ReturnsIn this study, the effects of factors influencing cumulative abnormal returns have been examined for two time periods: the first one being around one day of announcement (t_j to t+1), and the second one being around 20 days of announcement (t_20 to t 20).In the case of equity issue announcement, the selection of the factors affecting abnormal returns of a firm is primarily based on the previous studies in the context of both developed and developing countries. A review of literature shows that there are several firm-specific, issue-specific, industry-specific and country-specific factors that influence stock returns of a firm apart from the announcement of an issue alone. The characteristics of firms determine the degree of fluctuation in the abnormal returns (Tan et al, 2002; Balachandran et al, 2005; and Elayan et al, 2007), and include parameters such as firm size, issue size, dividend yield, research and development, intangible assets value, market capitalization, market-to-book ratio, capital intensity, total liabilities, return on equity and leverage. The following variables have been used in the study: Issue Size (ISSUE), Pre-Market Condition (PRECAR), Industry Type (IT), Value of Collateral Assets (VCA), Return on Equity (ROE), Price-Earnings (PE) ratio, Market Capitalization (MCAP), Operating Leverage (OPLEV), Debt-Equity (DE) ratio and Volatility of Stock Returns (VSR).Issue-Related VariablesThe present study uses bonus issue ratio calculated as the number of shares allotted against the current number of shares held by investors. In the case of rights issue, the number of shares issued scaled by the number of shares outstanding has been taken as the issue-related variables. The bonus issue size or the rights issue ratio has not been considered to avoid duplication of data in the model.Market-Related FactorsInvestors start bidding up the prices prior to the announcement date, if they anticipate revelation of information about the issue of bonus and rights shares. If the information is already anticipated in the market, then the stock price reaction to the announcement will be lower. …

Arun Kumar Gopalaswamy

Papers

The stability of long‐run relationships

The role of a firm’s innovation competence on customer adoption of service innovation

Dynamic interdependence between US and Asian markets: an empirical study

Stock price reaction to merger announcements: an empirical note on Indian markets

Factors Influencing Abnormal Returns around Bonus and Rights Issue Announcement