| Foreword |
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xvi | |
| Preface |
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xvii | |
| Acknowledgment |
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xxiv | |
| Section 1 Behavioral Finance Theory |
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Chapter 1 Behavioral Finance vs. Traditional Finance |
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1 | (23) |
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This chapter explored the development of behavioral finance theories from the traditional finance theories in detail. |
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Traditional financial theory has assumed that investors are perfectly well-informed in making financial decisions for many years. |
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However, the reality shows that these assumptions are not valid, especially over the last two decades. |
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It is observed that investors exhibit irrational behaviors by acting with emotions even if they are well-informed. |
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Because of the awareness of the importance human psychology in investment decisions, behavioral researchers have advanced their research in this direction. |
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Thus, behavioral finance theories have been developed with this in mind. |
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Chapter 2 Linking Personal Values to Investment Decisions Among Individual Shareholders in a Developing Economy |
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24 | (22) |
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This chapter examines the link between personal values and investment decisions among individual shareholders in a developing economy. |
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It contributes to the knowledge on behavioral finance and decision sciences that individual shareholders' personal values have influence on their investment decisions and the choice of companies they invest in. |
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It employs a grounded theory approach. |
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The chapter highlights that individual shareholders hold value priorities and that honesty, a comfortable life and family security play a significant role in their lives and their investment decisions and the kind of companies they make investment in. |
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In addition, to the individual shareholders, there is a clear distinction between a comfortable life and a prosperous life in the sense that they are not incentivized more by the latter but the former in their investment decisions. |
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Chapter 3 Chicken-Egg Dilemma for the Relationship Between Price and Volume in Borsa Istanbul |
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46 | (24) |
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This chapter empirically examines the relationship between stock prices and stock volumes for Borsa Istanbul, the only stock exchange in Turkey. |
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The price-volume debate has been a common focus in the literature as the chicken-egg dilemma probably since the financial markets started to operate in a competitive manner. |
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This chapter employs Borsa Istanbul and also considers the sector indices of the market. |
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The authors employ frequency domain causality analysis of Breitung and Candelon and wavelet coherence analysis of Grinsted et al. with comparisons of the results for each sector. |
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The findings show that (1) it is hard to argue for the existence of a distinct pattern in an emerging stock market like Borsa Istanbul; (2) there are several periods that propose challenges like the increasing foreign share, foreign shocks transmitted to the domestic market, and local effects; and (3) speculation is an inherit part of stock markets; and it is not possible to get rid of but rather act timely to minimize the adverse consequences and to deter market-wide repercussions. |
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Chapter 4 Does Parasocial Breakup Affect the Stock Market Returns? Evidence From an Emerging Market |
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70 | (19) |
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This chapter analyzes the impact of parasocial breakup on the stock returns in Borsa Istanbul as an emerging stock market. |
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In this study, 129 Turkish TV series finales, broadcast between 2005 and 2015, are employed as a negative mood proxy. |
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In line with the purpose of this chapter, GARCH-M model is used to obtain a more efficient parameter and alternative mood proxy dummies and other macroeconomic variables are incorporated into the analyses to examine the robustness of the effect of parasocial breakup on stock market returns. |
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The analysis presents robust evidence that the negative mood increases the stock market returns. |
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It also found that the effect of parasocial breakup on returns depends on the types of TV series and the channels they are broadcast on. |
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| Section 2 Psychological Concepts in Behavioral Finance |
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Chapter 5 Emotional Finance Plays an Important Role in Investment Decisions |
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89 | (15) |
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Most of the investors focus on human emotions not expressed openly while making investment decisions. |
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Emotions have a powerful position in making investment decisions. |
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They drive human behavior that is consistent with economic predictions while making investments. |
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Emotions play a significant role while making decisions on investments just like any other business decisions. |
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Behavioral finance tries to combine behavioral and cognitive psychological theory with conventional economics and finance to provide justifications for why people make irrational financial decisions. |
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The aim of this chapter is to understand whether emotional phases affect investors' decisions in different investment situations basing on levels of uncertainty. |
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Positive emotions like self-confidence, challenge, and hope increase the decision-makers tendency to exaggerate the commitment, and negative emotions, namely embarrassment and strain, do not. |
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Chapter 6 Individual Factors Affecting the Participation of Turkish People in the New Individual Pension System |
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104 | (13) |
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In Turkey, the first step of the individual pension system was based on volunteerism, but the voluntary system resulted in limited participation. |
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Thus, the second step of the system has started to be implemented mandatorily since 2017, and participants were allowed to opt-out the system within two months. |
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More than half of participants in the system preferred to leave the system. |
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Therefore, this study aims to examine individual factors affecting their decision of staying in this system. |
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A survey study was conducted with 374 people selected using the random sampling method. |
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As a result of the study, a positive relationship was found only between the dependent variable and gender, but a significant relationship was determined only between the dependent variable and education level. |
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Based on the results of this study, it is suggested that if the system will need to be improved, the low-performing fund management of the new individual pension system should be re-audited, and the confidence in the system should be increased in this way. |
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Chapter 7 Comparative Analysis of Service Quality Perception Between Public Sector and Private Sector Banks of India |
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117 | (22) |
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The chapter deals with the study of customers' expectations as well as their perceptions for service quality in banking sector. |
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Again, the study focuses on the influence of major demographic variables such as age, income, education, and occupation on customers' expectations and perceptions for service quality. |
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Moreover, this research work has been carried out with the help of primary data collected through a survey of 300 retail banking customers (i.e., 150 ICICI Bank customers and 150 SBI customers of Agra region). |
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In India, retail banking is one of the fastest growing industries. |
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The present study has endeavored to examine the service quality aspects of the two leading banks in Agra region and will also help the other private and public sector banks and financial institutions to have a better understanding of customer needs and the booming opportunities in retail banking in India. |
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Chapter 8 Personality and Emotional Biases |
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139 | (24) |
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Over the past decades, Cloninger et al. have developed a biosocial model of personality based on four temperaments and three characteristics. |
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This multidimensional psychobiological model of personality presents in the temperament and character inventory - revised (TCI-R) form. |
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Temperament subscales are novelty seeking (NS), harm avoidance (HA), reward dependence (RD), and persistence (P), and character subscales are self-directedness (SD), cooperativeness (CO), and self-transcendence (ST). |
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The study has been used in different disciplines of science, especially in psychology. |
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Behavioral finance is one of these disciplines of science. |
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TCI is frequently used, especially for investor biases. |
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In this chapter, TCI is used to examine the relationship between investor biases and personality. |
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The first three chapters are about personality. |
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Personality, personality approaches, and personality measurement methods examined in these |
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sections. In the fourth part, emotional biases in financial investment decisions searched. In the fifth part, literature studies showing the relationship between personality and financial decisions included. Finally, a field survey is conducted, and findings are revealed. |
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| Section 3 Behavioral Approach to Financial Issues and Investment |
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Chapter 9 Determinants of Market Capitalization in India and Its Impact |
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163 | (14) |
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The purpose of this chapter is to study the determinants of market capitalization and to investigate the impact of determinants of market capitalization. |
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This chapter uses secondary data from 2003-2016 relating to market capitalization, income per capita, stock market liquidity, etc. |
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The study employed descriptive test and normality test to describe the basic features of data and their distribution. |
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The multicollinearity test has also been used to check the interdependence among independent variables. |
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Multiple regression statistics has been used to determine the impact of independent variables on dependent variable. |
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The results show that there is a positive impact of determinants on development of stock market except political risk and inflation. |
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The findings will help stock market authority, individuals, and companies to understand the factors that affect share prices. |
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Chapter 10 Macroeconomics and Its Impact on Stock Markets of India, China, and Japan: ASIAN Markets |
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177 | (18) |
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The objective of this chapter is to examine the long-run and the short-run relationship between India, China, and Japanese stock markets and key macroeconomic variables such as exchange rates and inflation (proxied by consumer price index) of ASIAN 3 economies (India, China, and Japan). |
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Monthly time series data spanning the period from 2008 January to November 2016 has been used. |
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The unit root test, the cointegration test, Granger causality test, and pooled mean group estimator have been applied to derive the long-run and short-run statistical dynamics. |
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The findings of pooled estimated results of ASIAN 3 countries show that exchange rate has a positive and significant long-run effect on stock markets while the inflation has a negative and insignificant long-run effect. |
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In the short run, there is no statistically significant relationship between macroeconomic variables and stock markets. |
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This study emphasizes the impact of macroeconomic variables on the stock market performance of a developing economy (India and China) and developed economy (Japan). |
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Chapter 11 Digital Financial Inclusion in India: A Review |
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195 | (9) |
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Financial inclusion is a multidimensional approach. |
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With technology intervention in financial inclusion, electronic banking activity in rural India leads to increased use of financial services and better living standards. |
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In the rising market, many people using mobile phones still are not able to access banking products and financial services. |
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This indicates a huge untouched market for commercial banks. |
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In India, mobile banking services are still in the early stages of development. |
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Thus, the main objective of the chapter is to understand the factors that would act as drivers towards the adoption of mobile financial services and understand people's intention to adopt and use of mobile banking services which lead to increases accessibility towards financial products among rural people as well improve standards of living and overall development of the nation. |
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The study focuses on utilizing secondary sources which is related to financial inclusion to understand the new banking technology and identifies people's behavior towards adoption and uses of banking services. |
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Chapter 12 Employees Perception Regarding CSR Initiatives of the Companies in India |
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204 | (15) |
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Vikrant Vikram Vikram Singh |
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This chapter is an attempt to understand the impact of CSR on a very important stakeholder of the company (i.e., an employee of the company). |
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Employees are an integral part of the company, and at the same time, they can be the costumer of the company if using the product or services offered by the company. |
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This thing makes him a powerful tool to analyze the impact of various initiatives of the organization which will have long lasting impact on the company as well as on the society as a whole. |
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This study is conducted through a survey by preparing questionnaire for obtaining information from the employees of different organizations regarding their perception w.r.t. CSR activities. |
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The result of the report shows that CSR engagement of the company has positive impact on the employee. |
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But, the report also suggests that companies are lacking in terms of their CSR initiatives from last few years. |
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It further suggests that inputs and methods of the CSR activities by the organizations should improve in order to increase the productivity and belongingness of the employees. |
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| Section 4 Behavioral Corporate Finance |
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Chapter 13 The Impact of Tax Policies on Behavior of Albanian Taxpayers |
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219 | (32) |
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The Albanian state has experienced many changes of this system over the years due to the policies and different regimes that have followed, but there has always been a tendency for improvement. |
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The tax system and the informality are the mirror of the economy of the country, especially the favorable tax/ fiscal policies that have been adapted to the economy, which bring economic development and integration of all the gaps to a proper economic environment. |
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The chapter aims to find the effects of tax changes on the taxpayers. |
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Furthermore, the study focuses on how the business performance has been indicated from the tax control. |
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The data is collected from a survey which was focused in small and big businesses that operates in the capital city of Albania, in Tirana. |
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The questionnaire is realized during April 2018. |
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The main finds of the study are the different perception of businesses for the tax control and the impact of the fiscal changes on these businesses. |
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All these fiscal changes that the businesses faced were more in disfavor of the small businesses. |
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Chapter 14 Credit Rating and Its Interaction With Financial Ratios: A Study of BSE 500 Companies |
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251 | (18) |
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Credit rating evaluates credit worthiness of corporate and securities issued by government. |
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It provides investors with unbiased reviews and opinion about the credit risk of various securities. |
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The main aim of the chapter is to identify the relationship between the financial ratios and rating symbols. |
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The sample of 158 firms is taken into consideration that discriminates best ratings given by credit rating firms. |
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In order to examine the variability in ratings issued by various rating agencies, the time period of eight years starting from April 2009 to March 2017 has been selected. |
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The study employed the multinomial logistic regression model to explain the relationship among the variables. |
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The analysis suggests that variables such as debt to equity ratio, profit after tax, returns on capital employed, and return on net worth are those having the highest impact on ratings and thus there is also discriminating power among Indian rating agencies. |
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Chapter 15 An Impact Assessment of Goods and Services Tax in India Through Strategic Analysis Approach (SAA) |
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269 | (12) |
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This chapter focuses on the need, requirements, implementation, challenges, and impact of the goods and services tax on the Indian economic scenario. |
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The major stakeholders in the process are the Government of India (GOI), the individual states, the industry, the businesses, and the biggest tax reform since independence of India in 1947. |
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Often considered as overdue, it seeks to remove the various shortcomings and the loopholes in the existing system of indirect taxation in the country. |
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The GST bill saw more than a decade of political and economic upheaval in the country. |
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Subsequently, it became an act on 8th September 2016. |
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The various strategic analysis approach (SAA) of the GST mechanism (e.g., SWOT analysis, value chain analysis, PEST analysis, and SAP-LAP analysis) give an in-depth account of the various issues and potential challenges in the implementation of the GST. |
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Chapter 16 A Review on Role of Macro and Micro Banking Environment on Non-Performing Assets Management |
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281 | (14) |
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In a self-resilient economy, banking system assumes importance in imparting momentum to economic growth and prosperity through mobilization of financial assets. |
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Performance of banks, irrespective of their nature and function, is germane to their asset creation and maintenance capacity. |
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In a neo-liberal regime, radical policy changes have crept into loan mechanism, thereby subjecting the banks to efficiently recover the loans, which is a vital asset for any banking firm. |
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In this context, the authors through intensive review of literature identified micro and macro banking factors responsible for productive NPA management. |
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The macro banking factors refer to the economic environment whereas the micro banking factors refer to the bank and branch-specific factors. |
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The authors identified the critical role of organizational structure, involvement of employees, and organizational efficiency in driving prudent NPA management. |
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The authors have found that the efficiency in managing NPAs differ in public and private banks, which is attributed to involvement of employees. |
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| Compilation of References |
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295 | (32) |
| About the Contributors |
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327 | (5) |
| Index |
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332 | |
