April' 20
The IUP Journal of Applied Economics
Focus
Alok Ranjan Dutta, has investigated the relationship between firm size measured by employment and productivity in the unregistered manufacturing sector of Assam using a sample of 205 manufacturing units, interviewed through a field survey during December-June 2016-17. Regression technique is used to study the relationship between firm size and productivity. The results of the study indicate that size is not an important attribute of firm productivity in the unregistered sector. It also reveals that expanding the size of unregistered manufacturing sector may not always yield the desired result of improving productivity as in the case of registered sector. The author has stressed the need for providing other complementary facilities for the firms in the unregistered sector to grow further.
In the second paper, "Credit Risk: The Achilles' Heel of Higher Capital Under Basel Norms", the authors, Noor Ulain Rizvi, Smita Kashiramka and Shveta Singh, have examined the relationship between capital requirements and risk-taking behavior of Indian Commercial Banks using the panel regression technique on a sample of 46 banks for the period 2005-2018. A disaggregative analysis based on the ownership of banks and accounting for the effects of Global Financial Crisis (GFC) was also done. The results of the study indicate a significant positive relationship between the capital requirement and risk-taking behavior. The study finds a positive relationship between CAR and gross NPAs under all disaggregated samples during the post-financial crisis period.
In the last paper, "The Impact of New Generation Private Sector Banks on Public Sector Banks in India", the author, D Sreenivasa Chary, has made an attempt to study the differences between the performance of Public Sector Banks (PSBs) and New Generation Private Sector Banks (NGPSBs). The paper conducts factor analysis on a sample of 1,075 respondents for understanding the factors that influence the public's perception of customer service and service quality provided by the banks. The paper has also investigated the impact of the NGPSBs on the performance of the PSBs in terms of customer service and service quality. The study finds that out of the 22 items in the SERVQUAL/SERVPERF model, in respect of 14 items, NGPSBs do influence the performance of PSBs in India.
Consulting Editor
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| Article | Price (₹) | ||
| Does Productivity Increase with Firm Size in the Unregistered Manufacturing Sector? Evidence from an Indian State |
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| Credit Risk: The Achilles' Heel of Higher Capital Under Basel Norms |
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| The Impact of New Generation Private Sector Banks on Public Sector Banksin India |
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Does Productivity Increase with Firm Size in the Unregistered Manufacturing Sector? Evidence from an Indian State
Compared to the formal or registered sector, productivity of the firms in the unregistered sector is low, and it is widely held that low productivity is due to its small size. Based on the firm-level data generated from the field survey, the paper looks into the relationship between firm size and productivity in the unregistered manufacturing sector of Assam, a state in Northeastern India. Firm size in the study is represented by employment or number of persons engaged in the firms. The study finds that size is not an important attribute of firm productivity in the unregistered sector. Rather, the findings reveal a negative relationship between firm size and productivity. Relatively larger-sized firms are experiencing a decline in both labor and multifactor productivity in the sample. Hence, the paper submits that performance of the unregistered firms may not always be improved by expanding only their size.
Credit Risk: The Achilles' Heel of Higher Capital Under Basel Norms
The financial crisis of 2008-09 emphasized that banks succumb to rising pressure of Non-Performing Assets (NPAs), which affects their long-term sustainability and growth. Though India remained relatively unaffected by the crisis, the present state of NPAs in the country is rather alarming even after adhering to the Basel norms for decades. In the light of these concerns, this study investigates whether NPAs are an Achilles' heel of adopting higher Capital Adequacy Requirements (CAR) of Basel norms, introduced to bring financial stability. Panel regression has been employed on a sample of 46 banks for the period 2005-2018, to include both Basel II and III regimes to draw better conclusions about the relationship. To delve deeper, a disaggregative analysis based on the ownership of banks and accounting for the effects of Global Financial Crisis (GFC) is carried out. The study reveals a positive relationship between the two, post crisis. However, the possible explanation for this relationship is different from the explanation usually stated for developed countries that observe a similar relation.
The Impact of New Generation Private Sector Banks on Public Sector Banksin India
The study attempts to examine the differences between the performance of Public Sector Banks (PSBs) and that of New Generation Private Sector Banks (NGPSBs) and also the impact of the latter on the performance of the former in terms of customer service and service quality. To assess the customer perception on service quality provided by the banks, SERVQUAL/SERVPERF questionnaires were administered on a sample of 1,075 respondents across the states of Telangana, Andhra Pradesh and Maharashtra. Factor analysis was done to understand the factors that influence customer service, service quality and customer satisfaction. The elimination exercise performed iteratively in factor analysis resulted in retaining of 14 variables out of 22, grouped into four factors, namely, efficacy, empathy, expertise and efficiency. The results unequivocally proved that NGPSBs do influence the performance of PSBs.