Determinants of the Performance of Non-Financial Firms in India

XI Capital Markets Conference, 21-22 December 2012, Indian Institute of Capital Markets (UTIICM)

19 Pages Posted: 1 May 2013

See all articles by Kanaiyalal Parmar

Kanaiyalal Parmar

IBS Hyderabad, IFHE University

V. N. Reddy

Institute of Chartered Financial Analysts of India (ICFAI) - The Icfai University (IFHE), Hyderabad

Aditya Jadhav

IBS Hyderabad, IFHE University

Date Written: December 21, 2012

Abstract

Prior research on firm performance at aggregate level may not be applicable for the firms classified on group affiliation and listing. This is because there is substantial difference in the structure of these firms belonging to each category. We examine the difference in the structure of the Indian firms in each category by using Logit regressions. Further, we analyze firm level data for the period 2007-08 to 2009-10 using accounting based firm performance measure Return on Assets (ROA) since our data includes unlisted firms as well for which market based information is not available. We include the variable square of size along with size (and other variables) to account for non-linear relationship between the size and ROA. The results of cross section regressions show that ROA and size have inverted U-shape relationship for all categories of firms except BG unlisted category. Further we find that the impact of firm level variables on ROA is different in each category of firms.

Keywords: Return on Assets (ROA)

Suggested Citation

Parmar, Kanaiyalal and Reddy, Vanga Nagi and Jadhav, Aditya, Determinants of the Performance of Non-Financial Firms in India (December 21, 2012). XI Capital Markets Conference, 21-22 December 2012, Indian Institute of Capital Markets (UTIICM) . Available at SSRN: https://ssrn.com/abstract=2258308 or http://dx.doi.org/10.2139/ssrn.2258308

Kanaiyalal Parmar (Contact Author)

IBS Hyderabad, IFHE University ( email )

Donthanapally Shankarapalli Road
RAJAWALA ROAD
Hyderabad, RI Andhra Pradesh 501203
India

Vanga Nagi Reddy

Institute of Chartered Financial Analysts of India (ICFAI) - The Icfai University (IFHE), Hyderabad ( email )

Donthanapally Shankarapalli Road
RAJAWALA ROAD
Hyderabad, RI Andhra Pradesh 501203
India

Aditya Jadhav

IBS Hyderabad, IFHE University ( email )

Donthanapally Shankarapalli Road
RAJAWALA ROAD
Hyderabad, RI Andhra Pradesh 501203
India

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