Multiple board appointments and firm performance in emerging economies: Evidence from India

The relation between multiple directorships, busy directors and firm performance has been researched predominantly in the context of developed economies, notably the US. This paper extends the existing literature on multiple directorships in two ways; first, by providing additional evidence on its effect on firm performance, but with respect to an emerging economy, India, and secondly, by suggesting an alternative measure of directorial "busyness" that is more general in its applicability compared to those that have been applied in the existing literature. Using a sample of 500 large firms from the Indian corporate sector for the year 2002-03, the paper finds multiple directorships by independent directors to correlate positively with firm value thereby supporting the "quality hypothesis" that busy directors are likely to be better directors, a result that is different from the existing evidence on busy directors. Multiple directorships by insider directors are, however, negatively related to firm performance. Estimation of group and non-group companies separately reveals that the quality effect of independent directors persists for the former but disappears for the latter. In general, the results suggest that the relation between "busy" directors and firm performance may depend on the institutional context and on the type of directorMultiple Directorships, Busy Directors, Firm Performance

Auditor and Audit Committee Independence in India

This article reviews the regulations and governance reforms carried out in India with respect to auditor and audit committee independence. In doing so it critically compares them with the regulations existing in the US. This is followed by a discussion of the existing research on the effectiveness of audit committees and audit independence in corporate governance. Recent trends in audit committee and auditor characteristics for a sample of large listed companies in the Indian corporate sector are then discussed. The article concludes by suggesting some governance reforms that may be considered to further strengthen auditor independence and the functioning of audit committees in India.Corporate governance, India, auditor independence, audit committee independence

Debt and Corporate Governance in Emerging Economies - Evidence from India

We analyze the role of debt in corporate governance with respect to a large emerging economy, India, where debt has been an important source of external finance. First, we examine the extent to which debt acts as a disciplining device in those corporations where potential for over investment is present. We undertake a comparative evaluation of group-affiliated and non-affiliated companies to see if the governance role of debt is sensitive to ownership and control structures. Second, we examine the role of institutional change in strengthening the disciplining effect or mitigating the expropriating effect of debt. In doing so, we estimate, simultaneously, the relation between Tobins Q and leverage using a large cross-section of listed manufacturing firms in India for three years, 1996, 2000, and 2003. Our analyses indicate that while in the early years of institutional change, debt did not have any disciplinary effect on either standalone or group affiliated firms, the disciplinary effect appeared in the later years as institutions become more market oriented. We also find limited evidence of debt being used as an expropriation mechanism in group firms that are more vulnerable to such expropriation. However, the disciplining effect of debt is found to persist even after controlling for such expropriation possibilities. In general, our results highlight the role of ownership structures and institutions in debt governance.Debt, ownership structure, Corporate governance, institutional change.

Diversification, Propping and Monitoring - Business Groups, Firm Performance and the Indian Economic Transition

The industrial landscape of many emerging economies is characterized by diversified business groups. Given the well-known costs of diversification, their prevalence in emerging economies is a puzzle that has not been completely resolved. While there is evidence that business groups in emerging economies confer diversification benefits on group affiliated firms by substituting for missing institutions and markets, whether such benefits persist over the economic transition as institutions and markets develop is unclear. We investigate this issue in the context of the wide-ranging transformation of the Indian economy over the past decade. We find that business group affiliation continues to generate higher market valuation vis--vis standalone firms ten years into the transition, but diversification is not the source of these benefits. Instead, we find that propping through profit transfers among firms within a group and better monitoring through group level directorial interlocks explains the higher market valuation of business group affiliated firms. The effect of propping and directorial interlocks on firm value depends on the equity stakes of the controlling shareholders. Propping appears to be the source of group affiliation benefits in firms with below median cash flow rights of the controlling shareholders, while director interlocks are the primary source of the group effect for firms where the controlling shareholders have above median cash flow rights.business groups, diversification, propping, Monitoring, concentrated ownership

Simulating Contact Instability in Soft Thin Films through Finite Element Techniques

When a thin film of soft elastic material comes in contact with an external surface, contact instability triggered by interaction forces, such as van der Waals, engenders topologically functionalized surfaces. Innumerable technological applications such as adhesives; microelecromechanical systems (MEMS), and nanoelectromechanical systems (NEMS) demand understanding of the physics behind the mechanical contact, relationship between the morphologies, and detachment forces in such films. Indentation tests are important experimental approach toward this; there also exist many simulation procedures to model the mechanical contact. Both atomistic level and analytical continuum simulations are computationally expensive and are restricted by the domain geometries that can be handled by them. Polymeric films also particularly demonstrate a rich variety of nonlinear behavior that cannot be adequately captured by the aforementioned methods. In this chapter we show how finite element techniques can be utilized in crack opening and in contact-instability problems

Contact Instability in Adhesion and Debonding of Thin Elastic Films

Based on experiments and 3-D simulations, we show that a soft elastic film during adhesion and debonding from a rigid flat surface undergoes morphological transitions to pillars, labyrinths and cavities, all of which have the same lateral pattern length scale, close to \lambda/H ~ 3 for thick films, H > 1 micrometer. The linear stability analysis and experiments show a new thin film regime where \lambda/H \approx 3+ 2 (\gamma/3 \mu H)^(1/4) (\gamma is surface tension, \mu is shear modulus) because of significant surface energy penalty (for example, \lambda/H = 6 for H = 200 nm; \mu = 1MPa).Comment: Accepted for publication in Phys. Rev. Let

Fabrication of micropatterned thin films through controlled phase separation of polystyrene/polydimethylsiloxane blends by spin coating

In this study, we blended two readily available polymers, polydimethylsiloxane (PDMS), a semi-crystalline polymer, and polystyrene (PS), an amorphous polymer, both having widely varying physical properties. The blend is then spin coated to form a thin film. We investigated the effects of relative polymer concentration, spin coating speed, and environmental factors, such as temperature, on the ultimate morphologies of the phase-separated thin films. It was found that it is possible to regulate the morphologies of the thin films to achieve desirable microstructures such as spherical droplets, holes, bi-continuous lamellar structures, and tubules by controlling the fabrication conditions. The polymer blend films with higher PS concentrations were shown to form a bilayer system with an upper PS-rich layer due to the thermodynamic instability of the film caused by the rapid evaporation of solvent, while films with higher PDMS concentrations exhibited cohesive forces that engendered microtubule formation and led to high surface roughness