ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Index of Industrial Production

Small business organisations need short-run estimation and forecasting, and a model that has limited data requirements. Statistical techniques currently used are linear in approach, depend on the choice of the data set’s start–end period, and have low statistical reliability. The ensemble empirical mode decomposition approach is not constrained by these limitations or by the non-stationarity and non-linearity attributes of data. As an illustration, the Indian Index of Industrial Production time series is used to develop a coincident indicator of movements in the index that is simple to model, uses real-time data, and makes accurate forecasts.

FDI and Firm Competitiveness

As developing countries are increasingly opening up their economies to foreign direct investment, one of the principal objectives has been to enhance competitiveness of domestic firms using their network, technology and organisational skill. This study on India shows that competitiveness is more likely to be achieved with the presence of foreign firms rather than by simple purchase of foreign technology. Absorptive capacity of firms and institutional factors (namely, competition in the industry) induce competitiveness among firms. It is seen that both the degree of competition and the absorptive capacity of firms have strong effects on indirect benefits from FDI in enhancing competitiveness

Insider Ownership and Firm Value

This paper examines the effect of insider ownership on corporate value in India for the period of 2000-01 to 2003-04, using 1,833 Bombay Stock Exchange listed firms by investigating the relationship between insider's equity holding and firm value. While the "convergence of interest" or "monitoring" hypothesis predicts a positive relationship, the "entrenchment" hypothesis predicts a negative one. This paper also provides evidence that the relationship between insider shareholding and firm value is not linear in nature and documents a significant non-monotonic relationship between the two. Tobin's Q first increases, then declines and finally rises as ownership by insiders rises. It also confirms that foreign promoter/ collaborator shareholding has a significant positive impact on firm value.

Does Openness Promote Competition?

This paper uses firm level data for the period 1989-2001 to analyse the working of competition in India's manufacturing sector. It examines the impact of greater competition on profit mark-up over the last decade. The econometric analysis of the factors determining markup indicates that, contrary to received wisdom, trade openness by itself does not act to reduce the profit mark-up. The paper also investigates the degree of competitiveness defined as the Lerner price-cost margin. The analysis indicates that the estimated margins are in general high over the 1990s across all industries and in most of the industries considered these margins have been increasing over the second-half of the 1990s. The market by itself does not bring about competitive outcomes. The regulatory agencies probably have a crucial role to ensure a level playing field.
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