International Research Journal of Finance and Economics
 Issue 150
 July, 2016
Rising Inequality in Shining India
Ashish Sedai & Nazia Iqbal Hashmi

This paper presents a new set of integrated poverty and inequality estimates for India and Indian states for 1987-88, 1993-94 and 1999-2000. Regional disparities increased in the 1990s, with the southern and western regions doing much better than the northern and eastern regions. Economic inequality also increased within states, especially within urban areas, and between urban and rural areas. The macroeconomic policies responsible for these trends—fiscal tightening, regressive tax policies and expenditure cuts; financial sector reform and liberalization of rules for foreign and domestic investment, leading to more regional imbalance and skewed investment patterns. Most indicators that are examined in this paper have continued to improve in the nineties, but social progress has followed very diverse patterns, ranging from accelerated progress in some fields to slow down and even regression in others.
The Relationship between Directors’ and Officers’ Insurance Amount and Equity Values: Time-Series Evidence from Taiwan
Chien-Jen Wang

This study uses listed companies in Taiwan to estimate the effect of directors and officers (D&O) insurance amount on a firm’s equity values. Since the global financial crisis in 2008, D&O insurance amount of listed companies in Taiwan has exhibited a rising trend. The estimation results indicate that D&O insurance amount is significantly and positively correlated with firm equity values; therefore, it cannot be neglected as a value-predicting factor in the corporate governance model. In Taiwanese companies, D&O insurance amount is an index that reflects the quality of corporate governance. Both foreign and domestic investors prefer stocks of companies that have good corporate governance; consequently, such companies have higher equity prices.
Keywords: Directors’ and Officers’ (D&O) Insurance Amount, Equity Values, Corporate Governance Model
Roadmap: Multiple Perspectives On Strategic Management
Hamed Vares

Many leaders know it’s important to have strategies in order to align decision making in their businesses. They understand that they can’t observe and control everything in their organizations (much as many of them would like to). They earnestly want to develop good strategies and they get the theory. But when it comes down to the nitty-gritty of crafting strategy, they rapidly get bogged down. It’s a direct consequence of confusion about what a “business strategy” is and is not. A good strategy provides a clear roadmap, consisting of a set of guiding principles or rules, that defines the actions people in the business should take (and not take) and the things they should prioritize (and not prioritize) to achieve desired goals.
In the strategic management literature, there are multiple perspectives on strategy development and management, which provide a distinctive roadmap for corporate directors and executives.
Keywords: Strategy Development, Strategy Management, Perspective, Roadmap.
A Study on Stock Return Behaviour in Selected Indian Software Companies – Evidence from Bombay Stock Exchange
Senthilkumar G and Vignesh Prabhu V

Globalization of world financial markets has resulted in profound changes in national finance during the current decade. In this study to examine the behaviour, anomalous patterns and independence in stock returns. The study is based on secondary data and the daily average share price (the average of high and low) data of 15 most actively traded companies included in the Bombay Stock Exchange SMALLCAP, MIDCAP and LARGECAP were collected for the study. The data have been processed through appropriate statistical techniques. Based on the findings, the distribution of the mean returns is asymmetric and it is concluded that the daily stock returns are not normally distributed, regression analysis of stock returns show significant variation across all days of the week and the expected stock returns and size reveal no significance in size effect. This return pattern gives an idea for an investment strategy. This will enhance the profit or minimize the loss for an investor.
Keywords: Stock Market, Investment Decisions, Market Efficiency, Capital Market, Share Market.
Investigating the Impact of Services, Advertisement and Trust on Brand`s Special Value (Case Study: EN Bank in Karaj City)
Hadi Farhangian

This current research has done to investigate the impact of Services, Advertisement and Trust on Extension of the Brand`s Special Value in Eghtesad Novin Bank in Karaj City. Statistical population in this research is included customers of Eghtesad Novin Bank in Karaj City that 384 people were selected as sample size by using Cochran Formula and by using the method of simple random sampling was used. For data gathering by using the questionnaire was used. The questionnaires used in this research were standard and services and Extension of brand`s special value questionnaires were designed Tsong Wang (2011). Data with statistical programs in two levels of descriptive and inferential statistics were analyzed by using structural equation modeling (SEM). Questionnaires` stability was accounted by Cronbach alpha coefficient and a banking services characteristics and Extension of brand`s special value questionnaires are 0.847 and 0.813 respectively. All hypotheses in the level of 0.95 confidences were confirmed and the results showed that Services on Extension of Brand`s Special Value has been effected and in first rank has been located. Trust on Extension Brand`s Special Value is in second rank and Advertisement is in the third rank has been located.
Keywords: Extension of Brand`s Special Value, Services, Trust, Advertisement, Eghtesad Novin Bank
Effective Factors on Audit Report Lag in Firms Listed in Tehran Stock Exchange
Hosein Naseri

One of the main qualitative characteristics of financial statements is timeliness of their information. Perception and identification of of this fact that auditing time is effective factor in timeliness of financial data has led to conduction of researches on the lag in auditing report and its effective factors. In this regard, this research aims to investigate the audit lag in firms listed in Tehran stock exchange. In this research auditing lag means the time interval between end of financial year and date of audit report. The statistical pollution consists of 250 firms listed in Tehran stock exchange during 2006-2011(6 years). For doing so, seven hypotheses were tested in order to investigate the relationship among audit report lag, type of audit firm, extraordinary items in profits and loss, type of industry, listed among 50 superior firms in stock exchange, firm losses, size of auditing firm and change of auditor during finical years. For investigation on firm size Pearson coefficient test and for type of industry ANOVA and for other variables independent T test were employed. The results show that all variables except being among 50 superior firms in stock exchange and change of auditor during financial year have significant relationship with audit report lag.
Keywords: auditor, auditor report, audit report lag
Geographic Diversification and Firm Value
Chi-Feng Wang and Yan-Shing Chen

Although plentiful studies have been provided on examining the valuation effect of geographic diversification, the evidence is inconclusive. This study is motivated by these conflicting results, which could be an outcome of their failure in examining a non-linear geographic diversity-firm value association, and their failure in considering the heterogeneity among firms’ resources in influencing this relationship. We not only examine the curvilinear relationship between geographic diversification and excess value, but also investigate the moderating effect of R&D and advertising intensity on this relationship. We find a curvilinear U-shaped geographic diversification-firm value relationship. We further find that the above curvilinear relationship between geographic diversification and firm value is positively moderated by R&D and advertising intensity of firms. This finding highlights the importance of considering the contingency effect of geographic diversification. Our results also reconcile the conflicting evidence on geographic diversification in previous studies.
Keywords: geographic diversification, R&D intensity, advertising intensity, excess value
To Investigate the Relationship between Leadership Styles and Self-Government Employees in Kerman
H. Taboli, MR. Gohargazy, R. Karami zade and A. Gholamhosseini nejhad

Human resources and organizational performance also depends on non-human resources. In fact, trying to take advantage of non-human resources management by human resources. One needs a self-esteem that determine human behavior. By transferring control over many aspects of life, including one's own personal happiness, success, relationships with others, achievement, creativity and organizational performance affects. The findings suggest a significant correlation between leadership style and employees' self-esteem. Participatory leadership style in organizations that have used the self-esteem of employees more than organizations that benefit from diplomatic style.
Keywords: self-esteem, leadership, diplomatic leadership, participative leadership.
The Relationship between Bank Loans with Investment in Companies Listed on the Tehran Stock Exchange
Masood Misaghi and Abas Pasban selot

The main purpose of this research is to investigate the relationship between bank loans (long and short term) on companies' investment. Thus, the first, it is attempted to examine this relationship in state owned companies and, then, to compare of the difference to the non- state-owned companies. To achieve this goal, a total of 83 companies were examined during 11 years of 1382 to 1392 (in 913 year- firm). Thus, the present study is applied in respect to the purpose and non-experimental research (descriptive) in term of data collection methods. The results showed that there is a significant relationship between short-term and long-term bank loan ratio and investment by state-owned companies. In addition, the association of long-term bank loan ratios and investments in state-owned companies is weaker than non- state-owned companies. It seems that the results of this research can be applied to all individuals and organizations involved in the field of accounting and finance, especially companies operating in Tehran Stock Exchange.
Keywords: state ownership, bank loans, investment
The Effect of Different Business Strategies on Financial Reporting Quality
Hadi Zivari Naser and Amirhooshang Jangi

There are many evidences that researchers have considered the effect of different factors on financial reporting quality greatly. The goal of the present research is to study the relationship between business strategies and financial reporting quality in firms enlisted in Tehran Stock Exchange. The statistical sample consists of 105 firms enlisted in Tehran Stock Exchange whose data have been collected and analyzed for a 9 years period between 2004 and 2012.
Based on results gained there has not been a meaningful relationship between devising differentiation strategy in products and accounting conservatism level and earning management level statistically. It seems that differentiation strategy in products did not have an effective role in identifying financial reporting environment of firms in statistical sample during the research period. Meanwhile, based on findings there has been a direct relationship between leadership strategy selection in costs with accounting conservatism level and a reverse relationship with earning management level. It seems that strategy selection in costs has caused firm managers to use discretionary accruals less in their earning reports.
Keywords: differentiation strategy in products, leadership strategy in costs, accounting conservatism, earning management