It is my pleasure to bring you the third issue of the year, with its regular complement of articles and features.
Recent research in corporate finance recognizes that corporate policies and financial decisions that include capital structure, dividend policy, takeovers, and earnings management are determined by a nexus of explicit contracts with financial stakeholders that include shareholders and bondholders and by a nexus of both explicit and implicit contracts with non financial stakeholders that include suppliers, customers, rivals and labour. In this context, Professor Jayant R Kale and Professor Costanza Meneghetti in their paper, review the theoretical and empirical research that focus on understanding supplier and customer considerations in the determination of corporate policies to help managers to manage their firms better and maximize value.
Professor Abinash Panda and Professor Rajen K Gupta put forth that though management is an applied discipline, academic research in management has limited influence on management practice, more so in India where research and publication have replicated Western models, with limited context specificity. Their suggestions include creating an enabling ecosystem to bridge the gulf between rigour and relevance to make academic research more relevant and context specific to business organizations and practitioners in the Indian context.
The choice of capital structure is a fundamental issue in the financial framework of a business entity and achieving the right capital structure by defining the composition of debt and equity has continued to be a challenge for both academics and practitioners alike. Existing research has confined itself to the capital structure of developed economies. Professor Anshu Handoo and Dr. Kapil Sharma attempt to identify the factors which help determine the capital structure of Indian companies, using a sample of 870 NSE listed companies, both private and government, in the research period 2001-2010. The investigation was conducted using three dependent variables -- short term debt ratio, long term debt ratio and total debt ratio - ratios to total company assets, and ten explanatory variables. Managing capital structure, they conclude, is a balancing act in the trade-off a company makes between financial flexibility and fiscal discipline.
Environmental fiscal reforms (EFR) refer to a range of taxation and pricing measures that can raise fiscal revenues while furthering environmental goals and strengthening fiscal and environmental management. The round table discussion anchored by Dr. Ashish K Chaturvedi takes up the very relevant issue of the concepts and instruments of EFR and their application in the Indian context. The panel of experts also discusses the challenges of implementing EFR including policy framework and institutional capacity, posed by the social and political context.
Low-cost housing could be a good opportunity to address the needs of the "bottom of the pyramid" but there are several challenges in the space, as it emerges in the conversation between Professor Sourav Mukherji of IIMB and Ramesh Ramanathan, a social entrepreneur and Chairman of Janaadhar, a company that aims to provide quality budget housing to the underserved urban population. Ramanathan's challenges include learnings about the customer and the government as the "tuition fees" paid, building a purpose driven organization that makes its moral choices and finds a balance between "head and heart" or a constant negotiation of the tradeoff between commercial viability and positive social impact.
The sixth IMR Doctoral Conference is scheduled on December 22 and 23, 2014 and we are carrying an announcement in our back pages. I look forward to your involvement in IMRDC 2014 and to your comments and suggestions on the contents of this issue.
Nagasimha Balakrishna Kanagal
Editor-in-Chief
IIMB Management Review
Email: eic@iimb.ernet.in
