FINANCIAL ENVIRONMENT AND THE VALUE-LEVERAGE RELATION
Raj Aggarwal, NyoNyo A. Kyaw, and Xinlei Zhao
We find that the value-leverage relation varies considerably in magnitude across countries. We argue that this difference in value impact of leverage is affected by a country’s institutional settings. Indeed, we find that the value impact of leverage is less negative in bank-oriented countries and more negative in countries with highly developed stock markets. Further, leverage-value relation seems to be more sensitive to institutional settings among high-growth firms than among low-growth firms. These findings are robust to alternate model specifications and sub-sample selections.
A CAUSAL ANALYSIS BETWEEN CONSTRUCTION FLOWS AND ECONOMIC GROWTH: EVIDENCE FROM INDIA
Aviral Kumar Tiwari
The study examined the causal relationship between construction flows and economic growth under a static and dynamic framework by employing the Engel-Granger and IRFs approach with incorporation of endogenously determined structural breaks. The static causality test result provided the evidence of bidirectional Granger-causality between construction flows and economic growth in India. The dynamic causality analysis indicated that for the first ten years, a standard deviation innovation in construction had positive impact on the GDP, while the long-run impact was negative. However, a standard deviation shock/innovation in GDP had a negative impact on the construction flows of the economy for the first 10 years of the period under shock analysis, while for the long-run, the impact was in the positive direction.
ORGANIZATIONAL EFFECTIVENESS: AMERICAN SUBSIDIARIES IN ROMANIA
Andrea Banto and Harish Chandan
Romania is becoming increasingly attractive for foreign companies. As the number of U.S. firms is increasing in Romania, their subsidiaries need a better understanding of the local characteristics. This study examined the effect of four organizational culture traits - Involvement, Mission, Adaptability, and Consistency - on seven measures of firm effectiveness for 51 U.S. subsidiaries. This study expands the current research in emerging markets, highlighting the importance of organizational culture for the effectiveness of firms. The study found that all four organizational culture traits have a positive influence on effectiveness.
AN EXAMINATION OF SOCIAL REGULATION IN THE CONTEXT OF THE RESTRUCTURING OF STATE-OWNED COMPANIES
Anne Goujon Belghit
As a result of new internal regulations, public bodies are currently changing their structures, their strategies and the ways in which they function. We are going to analyze these transformations using the theory of social regulation and the theory of change. We have carried out two case studies (France Télécom and the SNCB) in two different countries (France and Belgium). We performed semi-directive interviews of management-level and non-management level employees. Taking as our context a public body in the process of restructuring: What is the nature of the relationship between the public body, its employees and rules and regulations?
RUPEE-DOLLAR EXCHANGE RATE AND MACROECONOMIC FUNDAMENTALS: AN EMPIRICAL ANALYSIS USING FLEXIBLE-PRICE MONETARY MODEL
C S Shylajan, Sreejesh S, and Suresh K G
This paper empirically investigates the link between Indian rupee-US dollar exchange rates and a set of macroeconomic fundamentals using flexible-price monetary model (FPMM) for the period 1996 M1 to 2010 M12. The Johanson-Juselius cointegration test result indicates the existence of long run relationship between exchange rate and the macroeconomic variables, implying the validity of FPMM model in Indian context even though there is no short run casual relationship exist in the VECM analysis.