Indian Journal of Finance and Banking 2022-08-10T12:50:17+00:00 Associate Professor K. M. Anwarul Islam Open Journal Systems THE GOVERNANCE ROLE OF LABOR UNIONS IN IMPROVING INVESTMENT EFFICIENCY 2022-04-27T05:15:24+00:00 Yong-Chul Shin Surjit Tinaikar Yu Zhang <p style="text-align: justify;"><em>We focus on the role that labor unions can play in influencing firms’ efficiency in corporate investment decisions where investment efficiency is defined as the extent to which deviations from optimal investment levels are minimized. We argue that unions may not simply be adversaries of managements as is often believed but have incentives to monitor managements in ways similar to that of other corporate governance players. These incentives stem from the fact that unions, like other corporate stakeholders, are adversely affected by investment inefficiencies that may result from firm-level overinvestment and underinvestment decisions. Consistent with this explanation, we find that labor unionization is indeed positively associated with improvements in investment efficiency and that these effects are generally stronger in bargaining environments that are favorable to unions. For instance, union effects in improving investment efficiencies are stronger in states where the Democratic Party is more influential and in states which have not enacted legislations that restrict union activities. These results indicate that union monitoring of investment efficiency is more likely to occur through channels that are a part of unions’ collective bargaining processes. Our results are robust to different measures of investment efficiency, different empirical specifications, and endogeneity of union membership.</em></p> <p style="text-align: justify;"><strong>JEL Classification Codes: </strong>J51, J59, O16, G31.</p> 2022-04-27T04:49:31+00:00 ##submission.copyrightStatement## EUROPEAN UNION AND THE UNITED STATES OF AMERICA: AN ECONOMETRIC INVESTIGATION ON THE PARADIGM SHIFT IN THE GDP’S GROWTH RATE TREND 2022-04-30T18:45:11+00:00 Dibin Kodanghat Karuvalappil Archana Balakrishnan <p style="text-align: justify;"><em>The recent war between Ukraine and Russia is yet another instance that emphasizes that economic overdependence may destroy the economic fabric of a nation. Taking this premise into consideration, this study aims to examine the long-term and short-term connection between the European Union and the United States GDP growth rates using tools like linear regression, Granger causality test, and impulse response function. Quarterly GDP figures of the European Union and the United States were taken for the period spanning 22 years, starting from quarter 2 of the financial year 1998-1999 to quarter 4 of the financial year 2018-2019. The Regression model and the Granger Causality test prove that the United States’ GDP growth rate is influenced by that of the European Union in the short-run as well as in the long-run, but the EU’s GDP is independent and does not follow the former. The possible explanation can be the trade surplus of the European Union over the United States in the recent past. Hence, the authors are of the opinion that a much more balanced trade between these two powerful economies would ensure the stabilization of the global trade and stability of the global power equation.</em></p> <p style="text-align: justify;"><strong>JEL Classification Codes: </strong>F40, F43, F44.</p> 2022-04-30T18:45:08+00:00 ##submission.copyrightStatement## THE SHORT- TERM CORONAVIRUS (COVID-19) PANDEMIC EFFECT: AN EMPIRICAL INVESTIGATION OF INDIAN STOCK MARKET (BSE) 2022-05-13T13:11:32+00:00 Mohd Atif Afzal Nasreen Khan Abdul Saboor Mohammad Mohd Taqi <p style="text-align: justify;"><em>India’s precautionary step toward COVID-19 led to 1.3 billion people enduring lockdown, consequently halting the wheels of the Indian economy. Though the crash of the stock market was evident and explanatory, it left all stakeholders (including the investors and government) with no choice. Deteriorating SENSEX and other indices forced investors to withdraw and lose attraction from the market and looped in more serious issues to the Indian stock market. This paper empirically analyses the short-term impact of COVID-19 on five selected BSE indices for SENSEX, FMCG, Bank, Corporate-Bond, and Industrial using econometric models. Stationarity was checked by Augmented Dickey-Fuller and Philips-Perron test. Autocorrelation was assessed and mitigated by Durbin-Watson, Breusch-Godfrey Serial Correlation LM test, and Cochrane-Orcutt transformation method. This study attempts to apply Multiple Regression, the GARCH model, Standard Vector Autoregression (S-VAR), and Impulse Response Function (IRF) to decode the relation. The results indicated that the COVID-19 pandemic is adversely affecting the performance of the Indian stock market in the short run. All the indices showed a negative relationship antecedent with the effect of COVID-19, except for the SPICBI index. This paper implies investment solutions for the investors and policymakers to cope with the unprecedented situation amidst COVID-19.</em></p> <p style="text-align: justify;"><strong>JEL Classification Codes: </strong>H54, R53.</p> 2022-05-13T13:10:59+00:00 ##submission.copyrightStatement## IMPACT OF THE COVID-19 ON THE SPENDING PATTERN AND INVESTMENT BEHAVIOUR OF RETAIL INVESTORS 2022-05-29T13:04:27+00:00 Farheen Siddiqui Anvita Raghuvanshi Srijan Anant Surendra Kumar <p style="text-align: justify;"><em>The year 2020 has witnessed the highly infectious disease Corona Virus outbreak impacted across the globe. This unpredictable and unprecedented calamity has pushed economies to struggle and strive. Most of the sectors in the economy were severely hit, which led to financial suffering. There is a paradigm shift in the circular flow of income, which has affected the lifestyle and changed people's spending and investment habits. This study aims to understand how the Covid-19 pandemic has influenced the financial decision-making and investment preferences of retail investors. This research paper also studies the changes in the spending pattern of people during the lockdown due to Covid-19. A sample survey was conducted through a structured questionnaire to determine the impact of the pandemic on individual investment decisions in the city of Lucknow. A random sampling technique has been used to collect the data for the study. The study's findings show that people's lifestyles and spending habits have changed significantly due to the pandemic fear and lockdown. The study also indicates that there has been a shift in the spending preference of people towards healthy products and essentials.</em></p> <p><strong>JEL Classification Codes: </strong>D90, G30, G40, G51, M10.</p> 2022-05-29T13:04:11+00:00 ##submission.copyrightStatement## IMPACT OF VALUE-ADDED TAX ON GROSS DOMESTIC PRODUCT OF BANGLADESH 2022-06-18T13:58:25+00:00 Jafrul Shahriar Jewel <p style="text-align: justify;"><em>International Monetary Fund advocates the Bangladesh government introduce Value Added Tax that was incepted in 1991. Before that, it was known as sales tax. Now Bangladesh scales up its country income status from a low-income country to a middle-income country, while value-added tax is the key player contributing a great part to gross domestic product. The study inspects the effect of value-added tax on Bangladesh's gross domestic product using a long dataset from 1991-1992 to 2020-2021. The study uses a co-integration technique invented by Johansen with a restricted V.A.R. named vector error correction model. This article finds that value-added tax has a specific positive impact on a gross domestic product that ensures good and continuous economic growth over the decades in Bangladesh.&nbsp;&nbsp; </em></p> <p style="text-align: justify;"><strong>JEL Classification Codes: </strong>K34.</p> 2022-06-18T13:49:07+00:00 ##submission.copyrightStatement## CUSTOMER TRUST IN E-BANKING DURING COVID-19 PANDEMIC IN BANGLADESH 2022-07-14T05:10:28+00:00 Md. Shahnur Azad Chowdhury Md. Shahidul Islam Md. Shariful Haque Mohammad Shyfur Rahman Chowdhury Mohammad Emdad Hossain <p style="text-align: justify;"><em>The purpose of this study is to determine the trust that E-Banking customers possess regarding the effect of customer satisfaction, which depends on the E-Banking infrastructure facility and E-Banking Communication environment. Using stratified random sampling in randomized block design, the response to a survey questionnaire has been obtained from 400 respondents via E-mail and hand-to-hand to know their opinion. Structure Equation Model (SEM) with Kolmogorov Smirnov Test, Shapiro Wilk Test, Mann-Whitney Test, Kruskal-Wallis Test, and Least Significant Difference (LSD) tests are used to determine the factors that affect E-Banking customer trust. It is observed, from this study, that an increased E-Banking communication environment, leads to the enhancement of customer satisfaction, as there is a positive significant relationship. Result also shows bachelor's degree and master's degree holder customers exhibit more trust in the E-Banking process than the customers with a lower level of education. Customers who started e-banking transactions during Covid-19 own more trust value than the customers who started transactions before the pandemic. So, the growth of E-Banking transactions may contribute positively to ensuring sound health in the future and especially in any pandemic situation.</em></p> <p><strong>JEL Classification Codes: </strong>G21.</p> 2022-07-14T05:10:19+00:00 ##submission.copyrightStatement## DETERMINANTS OF DIVIDEND POLICY: AN EMPIRICAL INVESTIGATION OF INDIAN COMPANIES USING PANEL DATA ESTIMATION TECHNIQUE 2022-07-31T14:57:21+00:00 Razique Anwar Sandeep Kumar <p style="text-align: justify;"><em>The decision to pay dividends by companies is among the most researched and contentious topics in corporate finance as, according to some scholars, it has a bearing on companies' valuation. The purpose of this research is to find out important factors that act as determinants of the dividend policy of Indian companies. The study employs secondary time series data gathered from the latest data available from the CMIE (Centre for Monitoring India) Prowess database. The study has been divided into three time periods i.e. 1) 2000-01 to 2009-10, 2) 2010-11 to 2020-21, 3) 2000-01 to 2020-21, by merging the two time periods and the panel data regression technique has been applied. The results of the analysis suggest that Return on assets, Debt to equity ratio, Cash and cash equivalents &amp; Debt to total capital ratio significantly affect dividend yield from 2000-01 to 2009-10 and from 2000-01 to 2020-21, whereas the results of the analysis from period 2010-11 to 2020-21 found Sales/Size, Return on the asset, and Debt to total equity ratio as determinants of dividend policy. These results corroborate the earlier findings that profitability, liquidity, and leverage are important factors in the decision-making of companies regarding the payment of dividends.</em></p> <p><strong>JEL Classification Codes: </strong>G1, G3, M2.</p> 2022-07-31T14:57:19+00:00 ##submission.copyrightStatement## FACTORS IMPACTING LIQUIDITY OF BANKS: AN EMPIRICAL STUDY FROM THE BANKING SECTOR IN THE UAE 2022-08-10T12:50:17+00:00 Manoj Kapur Arindam Banerjee Kunjana Malik <p style="text-align: justify;"><em>The primary purpose of this research is to substantiate the factors that impact the liquidity of the banks in the UAE. This research paper is an extension of the thesis that the primary author has undertaken to prove the test of significance and provide concrete evidence that the identified idiosyncratic and market related factors have significant impact on the liquidity risk for the banks in the UAE. The primary author has performed linear regression to identify the relation of the dependent and independent variables and once the test of significance is proved, the factors have been ranked using MURAME approach as part of ultimate thesis research objectives (MURAME approach is not forming part of this research paper). The research paper focusses on top 10 banks in the UAE and the study spans from 2010 to 2019. The study employs idiosyncratic factors like Deposit growth, NPL, CAR, ROA and market factors like GDP, Inflation, Unemployment, Oil prices and studies its relationship on dependent factor i.e., liquidity. Series of diagnostic tests are performed to find the impact of liquidity on idiosyncratic and market related factors.</em></p> <p><strong>JEL Classification Codes: </strong>E58, G32, G38.</p> 2022-08-10T12:50:12+00:00 ##submission.copyrightStatement##