Vol: 3, Issue: 3 2013

Page: 1-19

Review of Corporate Investment in Service Sector in India

Naresh Vashist

Received Date: 2013-05-08

Accepted Date: 2013-06-05

Published Date: 2013-07-06

This paper shows about the finance practices in the corporate finance. There are three leading areas of corporate finance practices that consistently require the academic concentration of scholars in corporate finance theory. These include corporate financial practices relating to investing, financing and finally the practices concerning distribution. Corporate Finance has been the subject matter of coherent connotations among the researcher, corporate managers and the practitioners, ever since the evolution ofcorporate finance theory. Distinguished scholars, who visited the theory of capital budgeting, capital structure, cost of capital, capitalization, dividend policy and working capital of the firm, have come out with a number of recommendations that are of paramount understanding to budding researchers.

References

• Akalu, Mehari Mekonnen and Rodney Turner (2001), “The Practice of Investment Appraisal:An Emipirical Enquiry”, ERIM Report Series Research In Management, Reference Number ERS – 2001-77- ORG.
• Allen, D. E.,(1991), “The Determinants of the Capital Structure of Listed Australian Companies:The Financial Manager’s Perspective”, www.agsm.unsw.edu.au/eajm/9112/pdf/allen.pdf
• Anand, Manoj and Malhotra, Keshav, (2007), “ Working Capital Performance of Corporate India: An Empirical Study”, ICFAI Journal of Applied Finance, Vol. 13, No. 1, pp. 46-81, January.
• Ashbaugh, Hollis, Collins, Daniel W. and LaFond, Ryan, (2004), “Corporate Governance andthe Cost of Equity Capital”, Papers. Ssn.com/sol3/paper.cfm?abstract_id=639681
• Babu, Suresh and jain, P.K. (2000), “The Influence of Nature of Business on Corporate DebtRatiosEmpirical Evidence from Indian Private Corporate Sector”, Finance India Vol.XIV No. 4, December,pp.1165-1173.
• Baker, Malcolm and Wurgler, Jeffrey, (2003), “A Catering Theory of Dividends”, http://www.nber.org/papers/ w9542.
• Barclay, M. and C. Smith, (2005), “The Capital Structure Puzzle: The Evidence Revisited”, Journal of Applied Corporate Finance17, pp8-17.
• Bauer, L. and Bhattacharyya, N , (2006), “ Rethinking Lintner: An Alternative Dynamic Modelof Dividends”, http:/hermes.ssrn.com/sol3/papers.cfm?abstract_id=914197.
• Bevan, A.and Danbolt,J. ,(2000), “Dynamics in the determinants of capital structure in the UK”, Working paper, University of Glosgow.
• Bhattacharyya, Malay and Banerjee, Ashok, (2001), “Determinants of Capital Structure Revisited Empirically”, The ICFAI Journal of Applied Finance, Vol.7, No.2,April,pp38-53.
• Bhattacharyya, N., (2003), “Good Managers Work More and Pay Less Dividends-A Model ofDividend Policy”, http://paper.ssrn.com/sol13/paper.cfm?abstract_id=114608.
• Bhattacharyya, S. K. and Raghavacahari, M, (2005), “Determinants of Effective Working Capital Management- A Discriminant Analysis Approach”, Indian Institute of Management Ahmedabad, Research and Publication Department, IIMA Working Paper 151.
• Bhole, L.M. and Mahakud, Jitendra (2004), “Trends and Determinants of Corporate CapitalStructure in India: A Panel Data Analysis”, Finance India, Vol.XVIII, No. 1, March,pp.37-55.
• Botosan, Christine A. and Plumlee, Marlene A. (2000), “ Disclosure Level and Expected Cost ofEquity Capital: An Examination of Analysis ’ Rankings of Corporate Disclosure andAlternative Methods of Estimating Expected Cost of Equity Capital”, http://papers.ssrn.com /paper.taf?abstract_id=224385
• Botosan, Christine A. and Plumlee, Marlene A. (2001), “Estimating Expected Cost of EquityCapital: A Theory- Based Approach”, paper.ssrn.com/sol3/paper.cfm? abstract_id =279309.
• Bruner, Robert F., Robert, Kenneth M. and Higgins, Robert C. (1998), “Best Practices inEstimating the Cost of Capital: Survey and Synthesis”, Financial Practice and Education, Spring/ Summer, 13-28.
• Buferna, Fakher, Bangassa, Kenbata and Hodgkinson, Lynn, 2005, “ Determinants of CapitalStructure Evidence from Libya”, No. 2005/08, Research Paper Series, ManagementSchool.
• Christoffersen, Peter, Jacobs, Kris and Vainberg, Gregory (2006), “Forward- Looking Betas”, papers.ssrn.com/sol3/papers.cfm?abstract_id=891467.
• Collins, M. Cary, Saxena, Atul K. and Wansley, James W., (1996), “The Role of Insiders andDividend Policy: A Comparison of Regulated and Unregulated Firms”, Journal of Financial and Strategic Decisions, Summer, volume 9, number 2.
• Collins, D.; M. Pincus; and H. Xie, (1999), “ Equity Valuation and Negative Earnings: the Roleof Book Value of Equity”, The Accounting Review 74,pp.29-61.
• Constas, M. (1995), “Essays on the Relationship between Stock Prices, Dividends andAccounting Earnings”, D.A.I., vol. 56, No. 1, pp.258 A
• Das, Sumitra and Roy, Malabika, (2000), “Inter-Industry Differences in Capital Structure: TheEvidence from India”, www.igidr.ac.in/ money/malabika.pdf.
• DeAngelo, Harry, DeAngelo, Linda and Skinner, Douglas J., (2000), “Special Dividend and the Evolution of Dividend Signaling”, Journal of Financial Economics, 2000, 57(3),pp.309.
• Deloof, Marc (2003), “Does Working Capital Management Affect Profitability of BelgianFirm?”, Accounting, Vol. 30, No3&4.
• Desai, Mihir A., Foley, C. Fritz and Hines Jr., James R., (2002), “Dividend Policy Inside theFirm”, http://www.nber.org/papers/w8698.
• Dhameja, N.L., 1978, “ Control of Companies and their Dividend Practices”, Margin, January.Drobetz, Wolfgang and Fix, Roger, (2003), “What are the Determinants of the Capital Structure? Some Evidence for Switzerland”, WWZ/ Department of Finance, WorkingPaper No. 4/03.
• Eny, Enyi Patrick (2005), “Applying Relative Solvency to Working Capital Management-The BreakEven Approach”, http://ssrn.com/abstract=744364.
• Gebhardt, W R , C M C, Lee and Swaminathan , B. (2001), “ Toward an Implied Cost ofCapital”, Journal of Accounting Research, 39, pp.135-176.
• Gode, D. and Mohanram, P. (2003), “Inferring The Cost of Capital Using The Ohlson-JuettnerModel”, Review of Accounting Studies , 8,pp.399-431.
• Graham, J. and C. Harvey, (2001), “The Theory and Practice of Corporate Finance : Evidencefrom the Field”, Journal of Financial Economics 60, pp.187-243.
• Graham, John R. and Harvey, Campbell, R. , (2002), “How Do CFO’s Make Capital Budgetingand Capital Structure Decisions ?” The Journal of Applied Corporate Finance , Vol. 15, No.1.
• Gropp, Reint and Heider, Florian (2008). The determinants of capital structure ; Some evidence from banks. Discussion Paper No. 08-015, Zew Research, ftp://ftp.zew.de/pub/zew-docs/dp/dp08015.pdf Accessed on March 20,2008.
• Habib, Ahsan (2005), “Information Risk and the Cost of Capital : Review of the EmpiricalLiterature”, http://papers.ssrn.com/sol3/papers.cfm?abstract_id=722781.
• Hail, Luzi and Leuz, Christian (2006), “International Differences in the Cost of Equity Capital:Do Legal Institutions and Securities Regulation Matter ?” Journal of Accounting Research, June.
• Hall, J. H. (2001), “The Incorporation of Risk in the Capital Investment Decision”, http://papers.ssrn.com/paper.taf?abstract_id=243163.
• Hermes, Neils, Smid, Peter and Yao, Lu, (2005), “Capital Budgeting Practices: A ComparativeStudy of the Netherlands and China”
• Howorth, Carole and Westhead, Paul (2003), “ The Focus of Working Capital Management inU K Small Firms”, Management Accounting Research, Vol.14, No. 2, June.
• Iturralde Sr. Txomin, Maseda Sr. Amaia, Jose, Leire San and Iturralde Sr, Txomin (2005), “ The Cash Management Routines: Evidence from Spanish Case”,http://ssrn.com/abstract=728365.
• Jain, P K and Kumar, Praveen (2006), “Working Capital Management Practices- A Study ofNifty Index Companies”,JIMS 8M, July- September, pp.4-21.
• Jog, Vijay M. and Srivastava, Ashwani K. (1995), “Capital Budgeting Practices in CorporateCanada”, Financial Practice and Education, Fall/ Winter 1995.
• Joos, Philip and Zhdanov, Alexei, (2007), “Earnings and Equity Valuation in the BiotechIndustry : Theory and Evidence”, http://ssrn.com/abstract=987924.
• Kakani, Ram Kumar, (1999), “The Determinants of Capital Structure- An Econometric Analysis”,Finance India , Vol. XIII No. 1, March,pp. 51-69.
• Kannadhasan, M. (2007), “Working Capital Management in a Public Limited Company- A Case Study”, The ICFAI Journal of Management Research, Vol. 6, No. 5,pp. 20-33,May.
• Karak, H. (1993), “Dividend Profit and Dividend Decision”, the Management Accountant,March 1993, pp. 235-237.
• Kato, Kazua, Kunimura, Michio and Yoshida, Yasushi, (1996), “Discretionary Behavior ofBanks’ Earnings and Banks’ Dividend Guideline in Japan”, www3.bus.osakacu.ac.jp/apira98/archives/pdfs/45.pdf
• Koedijk, Kees G. , Kool, Clemens J.M., Schotman, Peter C., Van Dijk, Mathijs A. and Nissen, Francois G.J.A. (1999), “The Cost of capital in International Financial Markets: Local versus Global Beta”, papers.ssrn.com/sol3/papers.cfm?abstract_id=166848.
• Krishnamurthy, K. and Sastry, D. U. , (1975), “Investment and Financing in The Corporate Sector In India”, Tata McGraw Hill Publishing Company Limited, New Delhi.
• Kumar, S., (1976), “ Corporate Dividends and Target Payout Ratios in India”, in BusinessEconomics and Planning, Edited by Ghose , Minocha and Gupta, Kalyani Publishers, New Delhi.
• Lee, C. Ng, D. and Swaminathan, B. (2003), “The Cross- Section of International Cost ofCapital”, Working Paper, Cornell University.
• Lintner, J. (1956), “Distribution of Incomes of Corporations among Dividends, RetainedEarnings and Taxes”, American Economic Review, 46, pp.97-113.
• Mackay, Peter and Phillips, Gordon M. , (2002), “Is There An Optimal Industry FinancialStructure?”, http://www.nber.org/papers/w9032.
• Marques, Manuel O. and Santos, Mario C. , (2003), “Capital Structure Policy and Determinants: Evidence from the Portuguese Banking Industry”, http://www.fep.up.pt/investigacao/cempre/actividades/sem_fin/sem_fin_01/ papers_pdf/paper_sem_fin_14nov03.pdf
• Medeiros, Otavio R. De (2003), “Questioning Fleuriet’s Model of Working Capital Management on Empirical Grounds”, http://ssrn.com/abstract=700802.
• Miao, Jianjun, (2005), “Optimal Capital Structure and Industry Dynamics”, The Journal ofFinance, December 2005, Vol. Lx, No. 6.
• Modigliani, F., and M. Miller, (1958), “The Cost of Capital, Corporation Finance and the theoryof investment”, American Economic Review, 48,pp. 261-275.
• Morgan, Donald P. (1999), “Bank Commitment Relationships, Cash Flow Constraints andLiquidity Management”, FRBNY Staff Report No. 108, January.
• Nagano, Mamoru, (2003), “Determinants of Corporate Capital Structure in East Asia- Are their differences from the Industrialization Countries?”, WIF-04-002, Working Paper Series, Institute of Finance, Waseda University.
• Omet, Ghassan and Mashharawe, Fadi, (2002), “The Capital Structure Choice in Tax Contrasting Environments: Evidence from the Jordanian, Kuwaiti, Omani and Saudi Corporate Sectors”, Working Paper Series, Faculty of Economics & Administrative Sciences, The Hashemite University, Jordan.
• Pandey, I. M. and Chotigeat, T., (2006), “The Capital Structure of Asian Firms”, Global Business and Finance Review, Spring, pp. 63-77.
• Penman, S. H. (1998), “Combing Earnings and Book Value in Equity Valuation”, Contemporary Accounting Research 15(3),pp.291-324.
• Ponnaluru, Sreenivasa Suresh (1998), “Fixed Capital and Inventory Investment, Dividends and External Finance in India Sugar Industry- An Econometric Investigation in Searchof their Determinants and Interdependence”, Finance India, XII No 2,June, pp.440-442.
• Raaballe, Johannes and Jakob Stig Hedensted, (2008), “Dividend Determinants in Denmark”, http://papewrs.ssrn.com/sol3/papers.cfm?abstract_id=1123436.
• Rajan, R. and L. Zingales, (1995), “ What Do We Know about Capital Structure? SomeEvidence from International Data”, Journal of Finance 50, pp.1421-1460.
• Reddy G, Sudarsana and Reddy S, Raghunathan (2007), “Working Capital in Small ScaleIndustry”, SCMS Journal of Indian Management, April-June, pp.48-55.
• Reddy, Subba, (2002), “Dividend Policy of Indian Corporate Firms: An Analysis of Trends and Determinants”, http://nseindia.com/content/research/paper71.pdf.
• Ross, Marc, (1986), “Capital Budgeting Practice of Twelve Large Manufacturers”, Financial Management( Winter 1986) Vol. 15, Issue 4, pp.15-22.
• Rudback, Richard S. and Sesia, Aldo (2003), “Dell’s Working Capital”, HBS Publishing CaseNo. : 9- 201-029; Teaching Note No.: 5-201-017
• Sahoo, Sudhansu Mohan and Omkarnath G. , (2005), “Capital Structure of Indian PrivateCorporate Sector : An Empirical Analysis”, The ICFAI Journal of Applied Finance, November, pp. 41-56.
• Sathyamoorthi, C R (2002), “Management of Working Capital in Selected Co-operative inBotswana”, Finance India, Vol. XVI No. 3, September, pp. 1015-1034.
• Slovin, Myron B., Sushka, Marie E. and Polocheck, John, (1994), “Dividend Reductions and Commercial Banks’’, http://papers.ssrn.com/sol3/papers.cfm?abstract_id=5739.
• Truong, Giang, Peat, Maurice and Graham Partington, (2007), “ Cost of Capital Estimation andCapital Budgeting Practice in Australia”, http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1019962
• Wu, Martin G H, (2000), “ The Strategic Role of “Cost of Capital” in Residual Income Measurement”, http://papers.ssrn.com/sol3/papers.cfm?abstract_id=250165.