Author Details

Firms use different sources of finance having independent characteristics to finance its operations and to succeed in attaining the ultimate goal of shareholders' value creation. Every decision in business has inevitable connection with finance and cost of finance. Indian financial market has been changing swiftly from bankingdominated to capital market-oriented system. Finance manager has a variety of alternatives at his disposal to raise funds but associated with different cost. The raising of funds may not be a great challenge in a liberalized era but the ultimate objective is efficient use of funds and earning a rate of return over the cost of capital. This will depend upon the capital structure and achieving a judicious mix of debt and equity funds into the capital structure. Improper mix of debt and equity will lead to wealth destruction of the shareholders and optimum capital structure results in wealth creation. This paper has examined the determinants of capital structure in auto industry, particularly in Tata Motors. The period of the study is 12 years: from 2000 to 2011. Seven determinants of capital structure, namely; non-debt tax shields, size of the business, profitability, growth of assets, tangibility, interest coverage ratio and liquidity. It has been observed that non-debt tax shield, size of the business, growth of assets as significant factors in deciding capital structure.

Keywords

Capital Structure, Financial Leverage, Size of Firm, Growth of Assets

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Energy Consumption and Economic Growth in India: A Causality Analysis

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Authors

Vikas Ramesh Adhegaonkar ¹

Affiliations
1 Unique Institute of Management, Pune, IN

Source

ANVESHAK-International Journal of Management, Vol 4, No 2 (2015), Pagination: 51-59

Abstract

This article examines the relationship between electricity consumption and economic growth in India for the period of 1970 to 2011. The close relationship between economic growth and electricity consumption suggests that energy policies of a country affect its economic growth. Earlier literature provides four hypothesis on relationship between economic growth and electricity consumption i.e., growth hypothesis, conservative hypothesis, feedback hypothesis and neutrality hypothesis. One of the objectives of this study is to find out which hypothesis is applicable to India. This study is based on secondary data and required data is collected from World Bank database. The main objective of this study is to find out long run relationship and direction of relationship between electricity consumption and economic growth. ADF test is used to find out stationary data series and level of integration between GDP and electricity consumption. Cointegration test is used to find out long run relationship between electricity consumption and economic growth. Granger causality model is used to examine causal effect between electricity consumption and economic growth. This study found that data series of GDP and electricity consumption are non-stationary at its level and stationery at 1st difference. Both the series are integrated with order one i.e. I(1). Result of cointegration test indicates no long run relationship between electricity consumption and GDP. Also, Granger causality test indicates no causal relationship between electricity consumption and GDP. On the basis of findings, it is concluded that electricity consumption does not affect the GDP, so government should focus on gradual shift towards non-renewable sources of energy.

Keywords

GDP, Electricity Consumption, ADF Test, Cointegration Test, Granger Causality Test.

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References

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