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Working Papers | 2008

Hedging Effectiveness of Constant and Time Varying Hedge Ratio in Indian Stock and Commodity Futures Markets

Ajay Pandey

This paper examines hedging effectiveness of futures contract on a financial asset and commodities in Indian markets. In an emerging market context like India, the growth of capital and commodity futures market would depend on effectiveness of derivatives in managing risk. For managing risk, understanding optimal hedge ratio is critical for devising effective hedging strategy. We estimate dynamic and constant hedge ratio for S&P CNX Nifty index futures, Gold futures and Soybean futures. Various models (OLS, VAR, and VECM) are used to estimate constant hedge ratio. To estimate dynamic hedge ratios, we use VAR-MGARCH. We compare in-sample and out-of-sample performance of these models in reducing portfolio risk. It is found that in most of the cases, VAR-MGARCH model estimates of time varying hedge ratio provide highest variance reduction as compared to hedges based on constant hedge ratio. Our results are consistent with findings of Myers (1991), Baillie and Myers (1991), Park and Switzer (1995a,b), Lypny and Powella (1998), Kavussanos and Nomikos (2000), Yang (2001), and Floros and Vougas (2006).

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Working Papers | 2008

Process, People, Power and Conflict: Some Lessons from a Participatory Policy Process in Andhra Pradesh, India

Vinod Ahuja, Gustafson Daniel J, and Joachim Otte

A large body of empirical literature highlights the need for stakeholder participation within the context of policy change and democratic governance. This makes intuitive sense and may appear to be a straightforward process of managing conflicting interests, building consensus, and lining up support. The reality, however, is often much more complicated and conflictive, even where there is general agreement on the policy objectives. The present paper examines these issues in the context of participatory policy development for the delivery of veterinary services by para-professionals in the Indian state of Andhra Pradesh. It illustrates the challenges inherent in the politics of participatory policy processes and the potential of 'agenda hijack' by influential partners, resulting in missed learning opportunities. It also offers insights on practical steps to counter these dangers, as potential lessons for practitioners and project managers engaged in participatory policy reform processes.

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Working Papers | 2008

Exploring Feasibility of Alternate Channels of Information Dissemination: Study of Rural Consumers Information Needs

Rajanish Dass

Information plays a vital role in lives of individuals/groups for development and growth. Just information does not serve the purpose, but accurate information does. The sources/tools/techniques used to get the desired information have evolved from the foremost person-to-person interaction to the latest search engines on the World Wide Web. Thus options to obtain information have widened. Search engines have enabled to get information from any corner of the world to person's desktop within fraction of seconds. In this paper, we try to study the information needs of rural population in India. This research tries to understand types of information required and frequency of search for information among the rural population. The study attempts to understand whether, demand exists for 'information on demand' or search engine service itself would unlock a new untapped demand. The socio-economic aspect, livelihoods of rural population and the available resources for information retrieval have been studied to enable, if search engine service could be made available to them and in what form. Whether this proposition of search engine services being made available to those who are unable to access or rural population would be a win-win scenario for the users as well as for the search engine service providers (considering the limiting factors). The paper ends, with possible alternatives to make search engine services available to those unable to access and at the same time can be attractive to the search engine service providers.

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Working Papers | 2008

Volatility Modeling, Seasonality and Risk-Return Relationship in GARCH-in-Mean Framework: The Case of Indian Stock and Commodity Markets

Brajesh Kumar and Priyanka Singh

This paper is based on an empirical study of volatility, risk premium and seasonality in risk-return relation of the Indian stock and commodity markets. This investigation is conducted by means of the General Autoregressive Conditional Heteroscedasticity in the mean model (GARCH-in-Mean) introduced by Engle et al. (1987). A systematic approach to model volatility in returns is presented. Volatility clustering and asymmetric nature is examined for Indian stock and commodity markets. The risk-return relationship and seasonality in risk-return are also investigated through GARCH-in-Mean modeling in which seasonal dummies are used for return as well as volatility equation. The empirical work has been carried out on market index S&P CNX Nifty for a period of 18 years from January 1990 to December 2007. Gold prices from 22nd July 2005 to 20th February 2008 and Soybean from October 2004-December 2007 are also considered. The stock and commodity markets returns show persistence as well as clustering and asymmetric properties. Risk-return relationship is positive though insignificant for Nifty and Soybean where as significant positive relationship is found in the case of Gold. Seasonality in risk and return is also found which suggests the asymmetric nature of return, i.e. negative correlation between return and its volatility.

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Working Papers | 2008

Choice of a Retail Store and Retail Store Format: A Hierarchical Logit Model

Tripathi Sanjeev and Piyush Kumar Sinha

The literature on store choice has mainly studied the store attributes, and ignored the consumer attributes in store choice. Even when, the consumer attributes have been incorporated the strength of relationship has been weak. Also, the literature on store choice has completely ignored format choice, when studying store choice. The paper argues for incorporating both the shopper attributes in store choice, and the store formats. Shopper attributes can be captured through the demographic variables, as they can be objectively measured, and these also capture a considerable amount of attitudinal and behavioural variables. The paper proposes to link store choice, format choice and consumer demographic variables, through a hierarchical logistic choice model in which the consumers first choose a store format and then a particular store within that format. A nested logit model is developed, and the variables predicting the choice probabilities are identified. The requirement of data for the empirical analysis is specified, the model has not been verified in the absence of empirical data but the operationalization of variables is done.

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Working Papers | 2008

Urban Development Strategy for Bihar: A Management Perspective

Prem Pangotra and Govil Astha

Bihar is among the least urbanized states in India with a level of urbanization just above 10% in 2001. The present study suggests a four-stage strategy for the urban development of Bihar. The stages are- (i) Increase in the rate of urbanization (ii) Increase in the resources of Urban Local Bodies (ULBs) (iii) Improvement in delivery of urban services, and (iv)Local economic development for employment generation in cities. The current state of finances of ULBs in Bihar is very poor on account of low yield of own revenue sources and low level of grants. The quality of services provided by ULBs in Bihar, measured by expenditure on these services is inferior in comparison to standard benchmarks and other selected cities in India. The location quotient analysis of cities in Bihar reveals lack of industrial development, and reliance on primary activities for employment. Positive correlation between economic growth and share of service sector in employment and negative correlation between economic growth and primary sector employment justify the need for efforts towards development of industrial and service sectors in the state.

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Working Papers | 2008

Salesperson's Customer Orientation: A Reconceptualization and a New Definition

Ramendra Singh and Abraham Koshy

This study critically examines the existing domains, conceptualizations and operationalizations of the salesperson's customer orientation constructs present in the literature. The widely used Salesperson orientation-Customer orientation (SOCO) construct (its domain, definition and scale) is examined in detail, and several inconsistencies were found. We also examine other individual-level and organizational-level orientation constructs, including market orientation, in order to appropriately delineate the boundaries of the salesperson's customer orientation construct. Based on a comprehensive review of literature on the marketing concept, and related literatures on several other relevant orientation constructs, we suggest a new definition of this mid-level construct. Not only is our new definition more encompassing (to include all activities of the salesperson related to customers, and not just their interactions with the customers) but is also more forward-looking (salesperson's enhanced role not just as need-fulfiller, but more as customers' value co-creator). We sincerely hope that the new definition suggested by us would encourage scale development efforts from researchers, that would aid in further reducing (if not removing)the several inconsistencies present in the literature related to salespersons' customer orientation, and its effect on their performance and effectiveness.

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Working Papers | 2008

Union Imperatives from Unionized White Collar Employees Perspective: The Case of Tata Employees Union

Anita Sarkar and Biju Varkkey

The paper examines the attitude of white collar unionized employees' towards their union and management under three key themes-work related dimensions, union related dimensions and staff members' loyalty towards union and management. The investigation is based on survey and informal interviews of white collar employees of Tata Centre, the corporate head-office of Tata Steel, India. The analysis suggests the existence of dual loyalty amongst those surveyed. For work related dimensions (e.g. job assignments, recruitment, salary determination, training, career) this aspiring segment believe that management has more influential role to play than the union. Management increasingly is curbing the power distance between unionized members and the officers to reinforce the loyalty of this white collar segment. However, staff members are still loyal towards the union, since union performs an important role of job security provider, which members' value. The paper also captures changing role of union over its sixty-one years of existence and the areas of improvement, based on its members' perception.

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Working Papers | 2008

Managerial Challenges in Addressing HIV/AIDS: Gujarat State AIDS Control Society (GSACS)

K. V. Ramani, Dileep Mavalankar, Tirupati Devanath, and Vijaya Sherry Chand

The spread of HIV/AIDS is not merely a problem of public health; it is also an economic, political, and social challenge that threatens to hinder decades of progress in different parts of Gujarat. There is an urgent need to significantly scale-up public health interventions that work to make a meaningful impact. While NGOs and community based organizations have a critical role to play in implementing these interventions amongst the various population groups, the government must shoulder the overall responsibility for planning, coordinating, mobilizing, and facilitating the various HIV/AIDS prevention, care and treatment services in the state. Generally, the departments of HIV/AIDS are dominated by doctor-managers who lack training in management. This working paper was developed with objective of enhancing the skills of the program implementers. In this paper, in first three chapters we describe the overall situation of HIV/AIDS globally and nationally. Major challenges in managing sentinel surveillance, behavior surveillance, targeted interventions and its subcomponents have been described in chapter four. Issues related to integration of HIV/AIDS activities with reproductive health has also been discussed in the chapter. In chapter five, we present a few case studies from Gujarat State AIDS Control Society. These cases focus on the managerial issues in the following areas: Project Management, Blood Bank Management, VCTC/ICTC Management, Behavioral Surveillance and MIS for Targeted Interventions. These case studies bring out the ground level realities and can help participants develop insights for better management of the HIV/AIDS programme.

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Working Papers | 2008

A study on the Current Role of SME's in the Indian IT Industry and Hypotheses on an Ecosystem for their Sustenance and Evolution

Prashant John and Rajanish Dass

This paper looks at the current challenges faced by the SME's in the Indian IT industry and formulates hypotheses on how an intermediary can create an ecosystem to ensure the sustenance and evolution of these firms. The play out in the industry is expected to such that the larger companies in the Indian IT sector will move up the value chain and as they do so they will increasingly move out of the body shopping mode that constitutes the lower end of the outsourcing spectrum. This creates an opportunity and a necessity for the emerging companies and SME's to fill the void.

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