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Journal of Risk and Financial Management ; 16(4):211, 2023.
Article in English | ProQuest Central | ID: covidwho-2304710


The role of Information and Communications Technology (ICT) cannot be ignored in today's era of working. Its effects are studied in several sectors by various researchers. This study covers the impact of ICT on the profitability of banks. Thirty-three banks are operating in India. A sample period of 10 years (2010 to 2019) was studied. The study also provides insight into how ICT helps the banks' profitability during and post-COVID-19. A panel data analysis is performed to estimate the results. This study found that ICT adversely impacts banks' profitability (NIM) in India in a linear association. However, the quadratic association indicates a positive U-curved relationship between ICT and profitability. In addition, the Net of Non-Performing Assets significantly but negatively impacts the connectivity of ICT and profitability. The findings imply that banks should invest in ICT to maximize the long run. The findings have no significant implication on all stakeholders, including policymakers, shareholders, and managers, to consider implementing ICT tools as an essential factor in enhancing a bank's profitability in the long run. In addition, the level of otherwise lowered investments in ICT cannot be a fruitful step. The current study augments the existing literature on banking by providing novel evidence on the association of ICT with profitability under the influence of NPA. This study argues for the application of ICT in banks in order to increase their profitability. ICT helps the bank maintain transparency, accountability, and even the reach of financial services increases. This situation again leads to the enhancement of the country's economy.

Vision ; : 09722629221096055, 2022.
Article in English | Sage | ID: covidwho-1820061


The multiple phase-wise lockdowns starting 24 March 2020, imposed to control COVID-19 spread in India, put a shrieking halt to industrial activities. Such nationwide lockdowns further exacerbated the financial distress, a long-standing challenge for small and medium-sized enterprises (SMEs). In this study, we examine how corporate governance forms like promoters? ownership, financial performance and market competition affect the distress of listed SMEs, both in the pre-COVID-19 era and during the COVID-19 period. To do so, the study adopts a two-fold sampling and multi-methodology approach. First, by applying panel data analysis on the first sample of 80 listed SMEs for the financial year (FY), FY 2017?2018 to FY 2019?2020, pre-COVID-19 period results are obtained. Second, by applying cross-sectional analysis on the second sample of 155 listed SMEs for FY 2020?2021, results during the COVID-19 period are obtained. Main results indicate that previous years? distress determines distress in the current year in the pre-COVID-19 era. In addition, promoters? ownership and return on equity reduce the possibility of distress, while current period competition is insignificant. Conversely, COVID-19 can exacerbate distress and render promoters? ownership insignificant. Furthermore, the COVID-19 period is characterized by reduced asset utilization. Therefore, any marginal increase in return on assets reduces distress. Interestingly, MC becomes an active determinant of distress during the COVID-19 pandemic. In summary, episodes like COVID-19 can modify the impact behaviour of the aforementioned determinants of distress. Notably, the results highlight the fragility of internal governance forms like ownership effects, while establishing the dominance of external factors like competition during the COVID-19 period.

Journal of Risk and Financial Management ; 15(4):148, 2022.
Article in English | MDPI | ID: covidwho-1762632


The paper's prime objective is to understand the impact of Shareholder activism on firm performance. This study is conducted in a unique setup where traditional activist investors such as pension funds and hedge funds are not present. However, the activism cases are increasing yearly in an emerging economy like India. We have created a comprehensive shareholder activism index (sha index) using multiple activisms and corporate governance factors. To measure firm performance, we have used valuation (Tobin's Q and Market capitalization), profitability (operating profit margin and net profit margin), and return ratios (Return on capital and return on equity). Panel data analysis (PDA) is employed for the current study as it overcomes the shortcomings of the time series analysis and cross-sectional studies. The sample comprises 37 listed firms' data for FY2017 to FY2020. Chosen firms have experienced activism instances at least once during the 2017–2020 period. As per our analysis, shareholder activism has a significant negative impact on valuation measured in market capitalization and profitability estimated by operating profit margin. Activism primarily impacts the other four parameters negatively, but it is insignificant. India is in the nascent stage of activism, partly explaining the insignificance of the effects of shareholder activism on firm performance. Also, activist investors are targeting companies. These attacks are not fructifying desired outcomes as promoters own over 50% stake in the listed companies. The latest data for FY2021 has not been considered for the study as covid-19 impacted the businesses during the financial year. Also, we cannot capture activism instances that are not reported in regulatory filings. Unlike past research in this area, we have used a comprehensive activism index as a proxy of activism and have employed PDA instead of event studies to assess the impact on firm performance. Also, this is the first such empirical study conducted in an emerging economy setup where neither large hedge nor pension funds are present.