National Institute of Financial Managment

Corporate acquisition can be considered as one of the best processes of corporate restructuring. This study is focused to evaluate the post-acquisition operating performance of listed Indian companies (acquirers) which have made acquisitions during subprime crisis period i.e. from FY 2007-08 to FY 2009-10. Paired sample t-test has been used on four operating performance indicators i.e. Return on Equity(ROE), Return on Assets (ROA), Operating Profit margin (OPM) and Operating Cash flow to Net Sales ratio (OCF/Net Sales) to check whether operating performance of acquirers has significantly improved post-acquisition. This study has revealed that there is no significant improvement in firms’ operating performance based on financial parameters i.e. Return on Equity (ROE), Return on Assets (ROA) and Operating Profit Margin (OPM), post corporate acquisitions made during subprime crisis period. The study finds that there was negative impact based on these parameters. Though Operating Cash Flow to Net Sales ratio has improved significantly for the companies which have made acquisition in FY 2007-08 and FY 2008-09 but similar findings could not be achieved for FY 2009-10. This study will find its significance in present scenario wherein corporate acquisitions are seen as the fastest way to achieve growth. Corporate world may derive its growth strategy from this study.

According to the development model India has adopted, development is viewed in narrow terms of economic development and, more particularly, GDP growth. This is largely due to our blind imitation of Western philosophy, which is based on materialistic values, and has given birth to current ruling economic ideology of free markets and competition, where earning money and accumulating wealth is considered primary goal of life. In its practical operation, this model creates serious socio-economic problems, such as ecological devastation, economic inequality, culture of consumerism, unemployment and social Darwinism. In India today, most components of social and economic well-being of people, such as education, health, employment and a healthy agricultural and industrial base, are in dismal state, indicating that our existing policy has failed. This calls for a fundamental rethink of our development policy. There is a need to embrace a more human-centric model of development, based on our cultural and civilisational ethos, which is ethico-spiritual and is deeply concerned with the problem of human welfare, social good and well-being of people. There is a need to redefine our development goals as creation of a happy, healthy and prosperous society.

In the backdrop of Make in India push by Indian government the purpose of this study is to examine the determinants of capital structure towards a better understanding of financing decisions to be undertaken by the Indian manufacturing firms. The data for the analysis is drawn from COSPI manufacturing index of Centre for Monitoring Indian Economy (CMIE). Our sample is an unbalanced panel of 1077 firms over the period 2000-01 to 2012-13. We apply system-GMM to study different factors that affect the leverage decision of firms in India. The findings of the study reveals that the choice of optimal capital structure can be influenced by factors such as profitability, size, growth, tangibility, non-debt tax shields, uniqueness and signal. We also find the existence of both pecking order theory and static trade-off theory in the case of Indian manufacturing firms. The results thus obtained are robust across the different proxies of leverage

PurposeThe purpose of this paper is to provide an empirical evaluation of the impact of infrastructure development on industry‐level productivity, output and efficiency in India over the period 1994‐2006.Design/methodology/approachThe first stage, estimated total factor productivity (TFP) and technical efficiency of eight important industries. In the next stage, the effects of infrastructure were estimated on TFP, output, labor productivity and technical efficiency. Fully modified ordinary least squares procedure was utilized to generate consistent estimates of the relevant panel variables in the cointegrated frameworks.FindingsThe results of this study are mixed. On the one hand, TFP, output and technical efficiency appear to be positively and largely affected by infrastructure. On the other hand, the effect of infrastructure on the labor productivity is somewhat negligible. In addition, the effects of information and communication technology on the industrial performance are found to be very weak.Originality/valueThis is the first study of its kind in the related literature which attempts to investigate the role of infrastructure in industrial performance, using alternative frameworks, namely, growth accounting and production function approach. The paper uses appropriate techniques to account for the potential endogeneity of regressors as well as for multicollinearity among infrastructure variables.