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849 items in total found

Journal Articles | 2022

Prospect theory preferences and global mutual fund flows

Nilesh Gupta, Anil V. Mishra, and Joshy Jacob

Journal of International Money and Finance

We examine the influence of Cumulative Prospect Theory (CPT) characteristics of fund returns on investment flows with a cross-country data of equity mutual funds. We find that a larger CPT value of the style-adjusted past returns is associated with higher fund flows in the subsequent quarter. The impact is greater for retail-oriented funds, relatively younger funds, and those with higher active share. While funds that score high on the CPT value attract incremental fund flows, they earn a lower alpha than their peers in the following year. The sensitivity of fund flows to the CPT characteristics is higher in countries with greater individualism and short-term orientation. The results are robust to several additional tests and hold across various subsamples of our data. The findings imply that investors have misplaced expectations about the future performance of funds that show higher CPT values and the fund managers cater to these investor preferences.

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Journal Articles | 2022

Pre-Kautilyan period: Crucible of pro-economic ideas and practices

Satish Deodhar

Annals of the Bhandarkar Oriental Research Institute

A number of studies have been conducted in the recent past throwing light on Kautilya’s contribution to economic policy. In his treatise Arthashastra, Kautilya informs that his contribution was based on received knowledge and gives credit to his predecessors. Unfortunately, the specialized works of the predecessors have been lost with the passage of time. I have attempted to scout and collate the economic notions that have appeared interspersed in the available Sanskrit treatises written prior to Arthashastra. Kautilya’s Arthashastra must have evolved from the crucible of such literature. In this context I discuss the four-fold classifications of purusharthas, ashramas, and varnas referenced in ancient texts and their attendant economic implications in the society then. I also cover the economic notions at the macro and institutional level which include policies of a welfare state, practical ideas about public goods, market facilitation, property rights, labour relations and unions, coinage, taxation, and budget deficit.

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Journal Articles | 2022

Work life balance indicators and Talent Management approach: A qualitative investigation of Indian luxury hotels

Sunil Buddhiraja, Biju Varkkey, and Stephen McKenna

Employee Relations: The International Journal

Purpose – The purpose of the study is twofold: (1) it captures the work–life balance (WLB) experiences of front-office employees to inductively classify a set of WLB indicators for the locally owned Indian luxury hotels and (2) it further examines the existing WLB practices of the select hotels with the lens of talent management (TM) approach of key human resource management (HRM) practices (Thunnissen, 2016). Design/methodology/approach – To explore and classify WLB indicators, an exploratory, qualitative approach is utilized by administering seven focus group discussions involving 70 front-office employees working in Indian luxury hotels. Seven in-depth interviews with HR professionals were triangulated with secondary data to capture and analyse the existing WLB practices of sampled organizations. Findings – Four clusters of WLB indicators that are grounded in the lived experiences of front-office employees are identified and presented. Interview data from human resource representatives unveil that hotels consider existing WLB practices as key HRM practices with an inclusive TM approach. The findings also surface the differences in expectations of front-office employees and WLB practices followed by the hotels. Research limitations/implications – First, the paper addresses the issue of WLB from employees’ perspective which is crucial for designing effective WLB practices. Second, the paper contributes to the existing TM literature from the perspective of WLB practices. Originality/value – The originality of the study is grounded in the employees’ lived experiences to classify the WLB indicators for India and further examine the WLB practices through the lens of the TM approach.

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Journal Articles | 2022

From fear to courage: Indian lesbians’ and gays’ quest for Inclusive ethical organizations

Ernesto Noronha, Nidhi S. Bisht, and Premilla D’Cruz

Journal of Business Ethics

This paper focusses on the experiences of Indian lesbians and gays (LGs) who are subjected to unethical acts of workplace bullying which get manifested through constant guesswork, comments and questioning about their sexual identity in the hostile Indian context. Given this, LG participants usually opt for secrecy and lead a double life, using ‘passing’ and ‘covering’ strategies to manage economic, social and psychological risks. Nonetheless, this paper rewrites the negative tenor of lesbians, gays, bisexuals and transexuals research by underscoring how LG participants move from fear to courage in their endeavour to live authentic lives while considering the broader organizational and social context. We argue that their courage is manifested mainly through deliberate micro-disclosures and a sense of defiance which can be enhanced if organizations are designed to be more inclusive and ethical. Consequently, participants defined inclusive ethical organizations as having conducive environments with trustworthy, supportive, secure, fair, unbiased and safe non-discriminatory policies open to the idea of diverse sexual orientations. Our findings point to the fact that, first and foremost, organizations must be crafted and sustained to be courageous within a hostile social climate, for employees to overcome their fears.

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Journal Articles | 2022

Policy uncertainty and behavior of foreign firms in emerging economies

Amit Karna and Shamim S. Mondal Viswanath Pingali

Management Decision

Purpose – This study aims to examine how foreign and domestic firms react to policy uncertainty in an emerging economy. In addition, the study investigates if older foreign firms better adapt to policy uncertainty than newer entrants. Design/methodology/approach – The study uses pharmaceutical sales data on India’s cardiovascular segment for January 2011–May 2016. The authors use fixed fixed-effects panel data regression to measure the market reactions of foreign and domestic firms faced with policy uncertainty.

Findings – While domestic and foreign firms react similarly to anticipated policy changes, foreign firms react more adversely to policy uncertainty. Among foreign firms, early entrants respond less adversely than new entrants.

Research limitations/implications – Foreign firms are able to cope with anticipated policy changes in similar vein as the domestic firms by way of a priori reading of the host country’s regulatory landscape. The foreign firms’ response to policy uncertainty is significantly different from domestic firms. The difference between the market response of foreign and domestic firms decreases over time.

Practical implications – The authors’ findings demonstrate that adaptability is the key for new foreign firms to face policy uncertainty. Foreign firms can respond to policy changes, especially the unanticipated ones by imbibing local practices. Social implications – The authors’ findings suggest that enhanced policy uncertainty hurts foreign firms more adversely than domestic firms, and newer foreign firms are more hurt with policy uncertainty than the existing ones. Such uncertainty could also have unintended consequences for consumer welfare.

Originality/value – The authors’ study uses two natural experiments in the same industry within short periods of time. The comparison offers key insights on the differences in domestic and foreign firm responses to the two types of policy uncertainty.

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Journal Articles | 2022

Impact of price path on disposition bias

Avijit Bansal and Joshy Jacob

Journal of Banking & Finance

Recent experimental studies have illustrated the influence of price-path, particularly the `non-straight' price-path on several aspects of investor behavior. The paper computes a proxy for price-path based on Cumulative Prospect Theory and with investor- level high-frequency trade data from the commodities futures market, demonstrates that the nature of the price-path significantly impacts the degree of disposition bias, after controlling for the level of returns and volatility of the commodity. We find that the experience of a favorable (unfavorable) price-path, decreases (increases) disposition bias among the traders with Prospect Theory preferences. The decline (increase) in disposition bias is an outcome of the decline (increase) in the propensity for gain realization, accompanied by a concurrent increase (decline) in the propensity for loss realization among the traders. We conjecture that both investor preferences and beliefs about future price movement, inferred from the price-path experienced, influence their trading decisions.

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Journal Articles | 2021

Risk-sensitive Basel regulations and firms’ access to credit: Direct and indirect effects

Balagopal Gopalakrishnan, Joshy Jacob, and Sanket Mohapatra

Journal of Banking & Finance

This paper examines the impact of risk-sensitive Basel regulations on debt financing of firms around the world. It investigates how firms cope with the impact through adjustments to their financing sources and capital investments. We find that the implementation of Basel II regulations is associated with reduced credit availability for lower-rated firms. Such firms mitigate the shortage in bank credit through increased reliance on accounts payable, lower payouts to shareholders, and reduced capital investments. The impact of the capital regulation is lower in countries that rely on the internal ratings-based approach. The key results are robust to controls for banking crises, bank-specific controls, and the inclusion of loan-level information. The findings of this paper substantially contribute to the understanding of the real effects of risk-sensitive bank capital regulations.

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Journal Articles | 2021

Borrowing from government owned banks & firm’s liquidation risk

Ankit Kariya

Journal of Corporate Finance

Government Owned Banks (GOBs) have other explicit or implicit objectives apart from profit maximization. In this paper, I study whether this affects the liquidation risk of firms borrowing from GOBs. Using the natural experiment of securitization reform in India that increased firms' liquidation risk, I find that the firms borrowing exclusively from GOBs did less reduction in secured debt usage compared to other firms. In the cross-section, the effect is more substantial in the subsample of firms that are more likely to face financial distress. These results suggest that borrowing from GOBs have less liquidation risk.

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Journal Articles | 2021

Auditors’ negligence and professional misconduct in India: A struggle for a consistent legal standard

M. P. Ram Mohan and Vishakha Raj

Columbia Journal of Asian Law

Gross negligence is a severe form of negligence. Its severity has been characterized using the presence of a mental element or mens rea accompanying the negligent act. Within the context of professional negligence, gross negligence is important as it constitutes professional misconduct. For auditors, a finding of professional misconduct through disciplinary proceedings can result in suspension or expulsion from the profession. In India, gross negligence is regularly used in disciplinary proceedings against auditors and also by the Securities and Exchange Board to determine whether an auditor has violated any securities regulations. Given the implications of a finding of gross negligence on the practice of an auditor, this paper seeks to discuss this Indian legal standard in detail. Using the statutory framework that governs auditors as a backdrop, this paper examines all reported High Court decisions from the 1950s till 2019 along with decisions of the Securities and Exchange Board with regards to an auditor’s duties. We find that the approach used to discern the existence of gross negligence across these decisions has been inconsistent. In the absence of any precedent from the Supreme Court of India that details what comprises gross negligence in the context of auditors, this inconsistent approach poses a problem. This paper offers a starting point for a discussion to minimize the uncertainty currently associated with auditors’ liability for professional misconduct, especially hoping to assist the newly established National Financial Reporting Authority in its decision-making process.

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Journal Articles | 2021

Understanding digitally enabled complex networks: a plural granulation based hybrid community detection approach

Samrat Gupta and Swanand Deodhar

Information Technology & People

Purpose – Communities representing groups of agents with similar interests or functions are one of the essential features of complex networks. Finding communities in real-world networks is critical for analyzing complex systems in various areas ranging from collaborative information to political systems. Given the different characteristics of networks and the capability of community detection in handling a plethora of societal problems, community detection methods represent an emerging area of research. Contributing to this field, the authors propose a new community detection algorithm based on the hybridization of node and link granulation.

Design/methodology/approach – The proposed algorithm utilizes a rough set-theoretic concept called closure on networks. Initial sets are constructed by using neighborhood topology around the nodes as well as links and represented as two different categories of granules. Subsequently, the authors iteratively obtain the constrained closure of these sets. The authors use node mutuality and link mutuality as merging criteria for node and link granules, respectively, during the iterations. Finally, the constrained closure subsets of nodes and links are combined and refined using the Jaccard similarity coefficient and a local density function to obtain communities in a binary network.

Findings – Extensive experiments conducted on twelve real-world networks followed by a comparison with state-of-the-art methods demonstrate the viability and effectiveness of the proposed algorithm.

Research limitations/implications – The study also contributes to the ongoing effort related to the application of soft computing techniques to model complex systems. The extant literature has integrated a rough set-theoretic approach with a fuzzy granular model (Kundu and Pal, 2015) and spectral clustering (Huang and Xiao, 2012) for node-centric community detection in complex networks. In contributing to this stream of work, the proposed algorithm leverages the unexplored synergy between rough set theory, node granulation and link granulation in the context of complex networks. Combined with experiments of network datasets from various domains, the results indicate that the proposed algorithm can effectively reveal co-occurring disjoint, overlapping and nested communities without necessarily assigning each node to a community.

Practical implications – This study carries important practical implications for complex adaptive systems in business and management sciences, in which entities are increasingly getting organized into communities (Jacucciet al., 2006). The proposed community detection method can be used for network-based fraud detection by enabling experts to understand the formation and development of fraudulent setups with an active exchange of information and resources between the firms (Van Vlasselaer et al., 2017). Products and services are getting connected and mapped in every walk of life due to the emergence of a variety of interconnected devices, social networks and software applications.

Social implications – The proposed algorithm could be extended for community detection on customer trajectory patterns and design recommendation systems for online products and services (Ghose et al., 2019; Liu and Wang, 2017). In line with prior research, the proposed algorithm can aid companies in investigating the characteristics of implicit communities of bloggers or social media users for their services and products so as to identify peer influencers and conduct targeted marketing (Chau and Xu, 2012; De Matos et al., 2014; Zhang et al., 2016). The proposed algorithm can be used to understand the behavior of each group and the appropriate communication strategy for that group. For instance, a group using a specific language or following a specific account might benefit more from a particular piece of content than another group. The proposed algorithm can thus help in exploring the factors defining communities and confronting many reallife challenges.

Originality/value – This work is based on a theoretical argument that communities in networks are not only based on compatibility among nodes but also on the compatibility among links. Building up on the aforementioned argument, the authors propose a community detection method that considers the relationship among both the entities in a network (nodes and links) as opposed to traditional methods, which are predominantly based on relationships among nodes only.

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