Corporate governance and underpricing of small and medium enterprises IPOs in India

Arora, Nischay; Singh, Balwinder

doi:10.1108/cg-08-2019-0259

Cited by 18 publications

(8 citation statements)

References 95 publications

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“…There is an opportunity to increase educational equityin the midst of these challenging timesby addressing the digital divide head-on, affirmatively examining inequities and investing in solutions that support access to and resilience of learning opportunities for all students across the country. To assist address the digital divide and allied accessibility issues, internet operators should ensure that internet connectivity is strong and also reduce the cost of internet bundles as Arora and Singh (2020) suggest that Indian investors should come forward and investment decisions in small-and medium-sized educational firms as well. The government should assist students to get laptops and tablets/smartphones as some students rated challenges with phones/laptops and connectivity as an important item.…”

Section: Recommendationsmentioning

confidence: 99%

COVID-19 response: students’ readiness for shifting classes online

Kundu

Bej

2021

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Purpose Coronavirus disease 2019 (COVID-19) pandemic has led education institutions to move all face-to-face (F2F) courses online across the globe. The purpose of this study was to investigate Indian students’ perception of readiness for this sudden shift and at the same time, report a possible approach of good institutional governance to respond to such an unprecedented crisis. Design/methodology/approach This study followed a mixed approach combining both quantitative (e.g. survey) and qualitative (e.g. interview) methods. A survey was distributed among 100 purposively selected students out of which 50 were college students and 50 were from secondary schools following heterogeneous purposive sampling techniques. In total, 30 participants were interviewed as per a set interview protocol. Data were analyzed descriptively and inferentially based on several demographic differences. Findings Findings revealed that students were neither satisfied nor ready for this sudden shift toward online education rather they felt fear, uncertainties, and several challenges owing to a deep digital divide to adapt to this unprecedented shift. They were found absorbed in memories of F2F mode before the COVID outbreak and take this online shift as a temporary adjustment owing to respond to the pandemic finding no possible alternate. Originality/value This study contributes and extends corporate governance literature by offering new evidence of perception differences between the company and customers as well. Education providers often assume that students desire online courses for their convenience and believe it equivalent to or better than F2F courses. This study challenges these managerial perceptions by examining students’ studies empirically and the findings will help regulators and policymakers to change accordingly.

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Section: Recommendationsmentioning

confidence: 99%

COVID-19 response: students’ readiness for shifting classes online

Kundu

Bej

2021

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“…Grounded on the corporate governance literature which professes that the endogeneity issues may engender biased and inconsistent estimates while examining the relationship between governance variables and organisational outcomes, the current study uses a two-stage least square estimator (2SLS) to address such issues. Backed by the prior research studies (Mak and Li, 2001; Larcker et al , 2007; Arora and Singh, 2020), it has been ascertained that board independence is endogenous which could lead to erroneous interpretation of data. As a result, the study used an instrumental variable approach to account for potential endogeneity that could skew our findings.…”

Section: Results and Analysismentioning

confidence: 99%

“…Limited research has focused on developing economies and how their typical governance structures differ from developed economies is still unclear. Various studies examining the impact of board structure and ownership structure on IPO underpricing, particularly in the Indian setting (Anand and Singh, 2019; Arora and Singh, 2020; Handa and Singh, 2017), are largely prescriptive and only analyse the direct link between the concerned variables. A significant research gap exists concerning the role of moderating variables in influencing organisational performance, especially IPO underpricing.…”

Section: Introductionmentioning

confidence: 99%

Board characteristics, ownership concentration and SME IPO underpricing

Arora

Singh

2022

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Purpose This study aims to explore the moderating impact of governance structure, that is, board characteristics including board size, board independence, board committees and ownership structure like ownership concentration, on the underpricing of small- and medium-sized enterprise (SME) initial public offerings (IPOs) in the context of an emerging economy such as India. Design/methodology/approach Using a sample size of 403 SME IPOs listed on Bombay Stock Exchange SME platform and National Stock Exchange EMERGE, this study uses moderated hierarchical regression analysis to investigate these relationships. Findings The findings highlighted that board independence, board committees and ownership concentration negatively influence underpricing measured using market-adjusted excess returns. While analysing the moderating relationship, this study finds that ownership concentration positively moderates the relationship between board independence and underpricing, as well as the relationship between board committees and IPO underpricing. Research limitations/implications This study is limited to a single country only. Although perfectly suitable for our research inquiry, it is imperative to check the validity of the findings by extending it to other emerging countries with similar socio-economic characteristics. Furthermore, this study tested the hypotheses concerning three board characteristics only. Hence, it could be extended to explore additional governance characteristics for a more comprehensive understanding. Practical implications This study provides a foundation for managers to adopt a fine-grained approach to effectively design the board structure ahead of an IPO event. Additionally, the findings may assist policymakers in formulating various policies and guide regulators in regulating the limit on ownership held by various shareholders to prevent their opportunism. The results of this study may further advise potential investors interested in SME IPO firms to critically consider the ownership concentration as a driving factor when scrutinizing their investment portfolios. Originality/value This study is unique as it advances the debate on the importance of a governance characteristic, that is, ownership concentration, as a moderating variable in the underexplored context of IPO underpricing of small- and medium-sized firms in India.

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“…We had the choice of either using a measure that past studies have used or create a new measure. Past studies have measured CG by various indicators such as board-based indicators (Arora and Sharma, 2016; Arora and Singh, 2020; Chen et al , 2006; Mathew et al , 2017), presence (or absence) of antitakeover mechanisms and the state of incorporation (Gillan et al , 2003; Bebchuk et al , 2009). In the US, states make their antitakeover laws sometimes.…”

Section: Methodology and Data Descriptionmentioning

confidence: 99%

A comparative study of corporate governance practices of Indian firms affiliated to business groups and industries

Mohanty

Mishra²

2021

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Purpose This paper aims to study the corporate governance practices followed by the listed companies in India to find out if industry and business group affiliation of firms influence their corporate governance practices. Design/methodology/approach The authors have created a corporate governance index for India using 15 of the variables used in past research. Hierarchical regression has been used in the study to control for possible inter-firm correlation in governance scores. Findings Using principal component analysis, the authors derive five factors for the corporate governance index – board composition, shareholder responsibility, ownership, responsible board behavior and fair executive compensation. Using the random intercept mixed-effects model, the authors find that corporate governance behaviors of firms affiliated to business groups are more similar within business groups than within industries. Practical implications Regulatory authorities generally target individual firms to enforce good corporate governance practices. As companies affiliated with the same business group exhibit similar governance practices, regulators can also set norms for business groups in addition to individual firms. Originality/value Scant research has studied the corporate governance behavior of firms affiliated with business groups. By making business groups (and industries) the unit of analysis, the authors have studied the corporate governance behavior of firms as a cluster in the context of an emerging country, India.

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Corporate governance and underpricing of small and medium enterprises IPOs in India

Cited by 18 publications

References 95 publications

COVID-19 response: students’ readiness for shifting classes online

COVID-19 response: students’ readiness for shifting classes online

Board characteristics, ownership concentration and SME IPO underpricing

A comparative study of corporate governance practices of Indian firms affiliated to business groups and industries

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