Volume 03 July 2014 Number 01 Importance of Services in Organised Retail - An Empirical Study Volatility Forecast of BSE Ltd., Broad Indices Analysis of it Infrastructure as A Factor Affecting E-Commerce and Its Impact on Consumer Satisfaction Impact of Social Networking on Employee Engagement at Workplace: an Empirical Study Based on it Industry in India Impact of The Economic Crisis on Corporate Financial Reporting: Stakeholders’ Perceptions Causal Loop Modeling of Macroeconomic Determinants of Stock Market Volatility Abhaya Ranjan Srivastava Dr. Saumya Singh Dr. Anand Mohan Agrawal Dr. Y. V. Ramana Murthy Dr. K. Kameshwari Dr. Shailendra Kumar, Vikalp Shubham Arya, Shreyash Bharadwaj Bhavya Mathur Divyanhsu Ojha Dr. Shailendra Kumar Hina Agarwal Sonam Bhadauriya Recognised by UGC Under Section 2(f)
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Volume 03 July 2014 Number 01
Importance of Services in Organised Retail -
An Empirical Study
Volatility Forecast of BSE Ltd., Broad Indices
Analysis of it Infrastructure as A Factor Affecting
E-Commerce and Its Impact on Consumer Satisfaction
Impact of Social Networking on Employee Engagement
at Workplace: an Empirical Study Based on it
Industry in India
Impact of The Economic Crisis on Corporate
Financial Reporting: Stakeholders’ Perceptions
Causal Loop Modeling of Macroeconomic
Determinants of Stock Market Volatility
Abhaya Ranjan Srivastava
Dr. Saumya Singh
Dr. Anand Mohan Agrawal
Dr. Y. V. Ramana Murthy
Dr. K. Kameshwari
Dr. Shailendra Kumar, Vikalp
Shubham Arya, Shreyash Bharadwaj
Bhavya Mathur
Divyanhsu Ojha
Dr. Shailendra Kumar
Hina Agarwal
Sonam Bhadauriya
Recognised by UGC Under Section 2(f)
Executive Editor
Keeping an eye on Kaleidoscopic range of issues influencing the business management and administration Prastuti - Journal of Management and Research forays into the realm of advances and amelioration being made in the field of management practices and studies. It provides a podium for the dissemination and experimentation for practices and policies of the business management and administration. Prastuti (ISSN 2320-2262) is published biannually in January & July by the Institute of Business Management, GLA University, Mathura.
GLA University of PRASTUTI, Journal of Management & Research assumes no responsibility for the views expressed or information furnished by the authors.
Please direct all the manuscripts, editorial correspondence and subscriptions by D.D. payable at Mathura to the EDITOR-IN-CHIEF, PRASTUTI, Journal of Management & Research, Institute of Business Management, GLA University, Mathura-281406, Ph. No.: +91-5662-250718, E-mail: [email protected]
Prof. D.S. Chauhan, Vice-Chancellor, GLA University
Prof. Anand Mohan Agrawal
Dr. Ankit Saxena
Editor’s Preface
The world economic spectrum has gone under tremendous transformation in
last few months in all aspects. The world economy is in the progression of resurgence,
combating the several issues like international terrorism and inter-continental political
issues. In India, we witnessed a historical political transformation. As always, the
hopes from the new government are elevated and next few years are quite challenging
for Indian economy.
Coming to the current issue of this journal, I am pleased to inform that, we have
published six quality research publications spreading different functional areas of
Management domain. The papers have approached to various domains of economy.
Srivastava et. al. in their contribution entitled “Importance of Services in
Organised Retail – An Empirical Study” have derived that services provided to
customers are one very essential factor which leads to more number of customers to an
organisation. Jharkhand a comparatively new state is also witnessing a significant shift
from unorganised retailing to organised retailing. The study aims to assess the
importance of service in attracting and increasing customers for the organised retail
outlets. Need for good service as an important factor in increasing and attracting
customers to the organised retail outlets cannot be negated and the same has been seen
expressed by the respondents in this study.
Murthy Y. V. R and Kameshwari K. in their empirical work entitled “Volatility
Forecast of BSE Ltd., Broad Indices” have underlined that volatility plays a very
important role in any financial market around the world. This research attempts to
present risk metrics which helps to manage risks such as to measure the difference in
actual and expected volatility which can act as an effective hedging tool, portfolio
diversification and overall risk management.
Kumar et. al. in “Analysis of IT Infrastructure as a Factor Affecting E-Commerce
and its Impact on Consumer Satisfaction”, have correctly stated that the economic
reforms of 1991 have completely changed the scenario in which business is being done
in India. The advancement in Information Technology (IT) also helps the e-commerce
to grow rapidly. This paper extends the research on e-commerce in India. The paper
uses a survey based approach to draw the conclusions. Using data from 300
respondents, they concluded that Internet unavailability, slow access of internet,
security concerns and the transaction process are the major concerns exist. The paper
shows the impact of these factors on consumer satisfaction on e-commerce.
Mathur et. al. in their research on a quite contemporary emerging phenomena
viz. “Impact of Social Networking on Employee Engagement at Workplace: An
Empirical Study Based on IT Industry in India” have derived that organizations across
the globe struggling with how best to introduce social networking tools - blogs, micro
blogs like Twitter, Collaboration platforms like Facebook to internal audiences. Social
networking has always been stated for distracting employees but with its proper and
regulated use, it can have the obverse effect. This paper examines, explores and gains a
quantitative insight of the same in detail and establishes that employee engagement is
a function of use of social networking at workplace. People often make use of social
networking to gain work related ideas, enhance accuracy in decision making and as a
medium of knowledge and information sharing.
Hina Agarwal in her research paper entitled “Impact of the Economic Crisis on
Corporate Financial Reporting: Stakeholders’ Perceptions” underlines that in the age
of globalization, no country can remains isolated from the fluctuations of world
economy. Heavy losses suffered by major International Banks affect all countries of the
world as they have their investment interest in almost all countries. This study aimed
to stand on the opinions of relevant stakeholders in the field of corporate financial
reporting practices after economic crisis in India. In the opinion of stakeholders there is
need to apply global reporting practices to smoothen the corporate’s working and for
making the system more transparent.
Sonam Bhadauriya in her contribution entitled “Causal Loop Modeling of
Macroeconomic Determinants of Stock Market Volatility” explores logically
structured framework for interrelationship among the stock market returns and the
macroeconomic determinants via a causal loop diagramming. Stock market dynamics
or volatility refers to the variation in the stock price changes during a period of time.
The volatility of stock market indicators goes beyond anyone’s reasonable
explanations. The modeling of stock market volatility is one of the key areas of present
financial research as stock market is the main determinant of economic development of
a country.
I take this opportunity to invite all the professionals, researchers and
academicians to send their conceptual or empirical papers, case studies and book
reviews for publishing in this journal. Finally, I thank all the reviewers for their time
and valuable suggestions and also congratulate all the contributors for their research.
Anand Mohan AgrawalEditor-in-ChiefPrastuti
Contents
1. Importance of Services in Organised Retail - An Empirical Study 01-07
Abhaya Ranjan Srivastava, Dr. Saumya Singh, Dr. Anand Mohan Agrawal
2. Volatility Forecast of BSE Ltd., Broad Indices 08-34
Dr. Y. V. Ramana Murthy, Dr. K. Kameshwari
3. Analysis of it Infrastructure as A Factor Affecting E-commerce and
its Impact on Consumer Satisfaction 35-45
Dr. Shailendra Kumar, Vikalp, Shubham Arya, Shreyash Bharadwaj
4. Impact of Social Networking on Employee Engagement at Workplace:
An Empirical Study Based on it Industry in India 46-52
Bhavya Mathur, Divyanhsu Ojha, Dr. Shailendra Kumar
5. Impact of The Economic Crisis on Corporate Financial Reporting:
Stakeholders’ Perceptions 53-63
Hina Agarwal
6. Causal Loop Modeling of Macroeconomic Determinants of
Stock Market Volatility 64-71
Sonam Bhadauriya
Retailing is one of the most active and attractive sector of the last decade. While retailing itself has been present through history in our country, it is only the recent past that has witnessed so much dynamism in India. Organised retail has been preferred by customers because of various features such as variety, ambience, convenience, better services, etc. Services provided to customers are one very essential factor which leads to more number of customers to an organisation. Since their starting organised retailers have used customer service as one of the important tool to attract new and retain existing customers. Jharkhand a comparatively new state is also witnessing a significant shift from unorganised retailing to organised retailing.
This study aims to assess the importance of service in attracting and increasing customers for the organised retail outlets. A total of seven statements signifying services have been considered in the study. The various services focussed in the study are – the faster billing procedures, better customer relationship management practices, free gift packaging facility, free alteration, child care facility, exchange facility and personal attention to customers.
Importance of Services in Organised Retail - An Empirical Study
Abstract
Preamble
Retailing is one of the most active and attractive sector
of the last decade. While retailing itself has been present
through history in our country, it is only the recent past
that has witnessed so much dynamism in India. The
world ‘retail’ means selling directly to customers in small
quantities as demanded by them. In India for
generations the nearby grocery stores were the
convenient options for the customers to purchase goods
for themselves. As organised retailing ventured in the
Indian market it changed the buying patterns of the
Indians. Over the past few years there has been a
proliferation of organised retail players from abroad.
Existing players have been trying to increase their
presence in the retail market. A number of large
domestic business groups such as Tata, Reliance, ITC,
RPG, Raheja and Piramal have setup malls and built
businesses within retail. Organised retailers provide
many distinctive advantages as compared to the
traditional retailers like - pleasant ambience,
convenience, variety, good infrastructure, better
services etc.
India has been ranked on fourteenth position on the
Global Retail Development Index in the AT Kearney
Report 2013 and fourth in Asia. As an affect of the global
slowdown India’s growth rate has slipped to 5 percent
from a 10 year average of 7.8 percent. On the GRDI
India’s position has gone down by nine spots in
comparison to the ranking of 2012 but it still holds a
strong position. The world's largest developing markets -
particularly the BRIC nations (Brazil, Russia, India, and
China) still allure the largest global retailers because of
the anemic growth in European and North American
markets. But it has become tough for them to have a
Abhaya Ranjan Srivastava*Dr. Saumya Singh**
Dr. Anand Mohan Agrawal***
*Assistant Professor, Department of Management, Birla Institute of Technology, Lalpur, Ranchi**Associate Professor, Department of Management Studies, ISM Dhanbad***Pro Vice Chancellor, GLA University, Mathura
01
global expansion strategy in retail. Every market has its
own characteristics which require unique strategies for
success. The GRDI 2013 report highlights that global
retailers have become more cautious and have taken a
step back from aggressive expansion.
India still remains a high-potential market with an
accelerated retail market growth of 14 to 15 percent by
2015. India’s GDP growth rate of 6 to 7 percent, the rising
disposable income particularly of the Indian middle-class
and the rapid urbanisation signifies the retail growth in
India. The changes made in the FDI regulations in October
2012 by the Government of India indicate a positive
environment for the international retailers and retail
growth in general. Organised retail share in India is still
around 5percent which indicates a room of high growth
opportunity for the organised retailers. Retailers are
presently expanding their presence in tier 2 and tier 3
cities because the cost of real estate has skyrocketed in
the metro areas. Metro, Bharti-Walmart and Carrefour
have increased their presence in these markets.
Jharkhand also witnessed the entry of some of the retail
chains like- Spencer, Reliance, Big Bazaar and Vishal
Megamart Most of these started with multiple number of
outlets but all of them could not sustain. Closure of some
of the retail outlets in Jharkhand sent a warning signal to
the existing ones and also to those who were looking to
enter in this market. It has become now clear to the retail
players that only opening the stores will not lead to
success rather one has to catch the pulse of the market
and act accordingly within time. The companies have to
be update and upgrade them with the latest
developments to be successful. This study was conducted
in Jharkhand witnessing the changes going in its retail
market. Before moving further let us have a brief look on
the factors advocated as important by researchers in the
past.
Price: It is one of the most important factors for Indian
consumers in their purchase decision. Organised retailers
have large presence due to which they achieve economies
of scale in their operations. So they are able to offer
products at cheaper rates as compared to the traditional
retailers. This has helped them in attracting new
customers and retaining the existing ones.
Variety: Another strong point of organised retailers has
been variety which is much higher as compared to the
traditional retailers. The availability of products even in
various sizes and quantities has increased their customer
base. Nuclear families, bachelors and persons living alone
away from their family prefer retail outlets because they
are able to buy products in small and varied quantities.
Brand Image: Their brand image has also helped in getting
more customers. Entry of international players and big
business houses in the retail sector has increased the
confidence of the customers in their purchases. The
customer feeling of getting reasonable or better quality,
equal treatment and the confidence of not getting
cheated has definitely increased their customer base.
Convenience: Proper locations, long opening hours, pick
and choose facility and pleasant ambience has added
convenience in shopping to the Indian consumers and is
leading to more customers for the organised retailers.
Promotions: Ability to advertise which is not possible
with the neighbourhood stores has differentiated them
and attracted customers. Use of technology to inform
customers by sms, e-mail has helped them to inform
customers in advance about their new schemes and
offers. This has made their promotional efforts more
attractive and organised as compared to the traditional
retailers.
Different Payment Options: The option of paying in cash
or through debit & credit cards has also attracted more
customers. The choice of not carrying cash while
purchasing has increased convenience and safety to the
customers. This has also led to more impulse and
unplanned purchases by customers thus increasing the
share of organised retailers in the Indian retail.
Infrastructure: Shopper friendly store design, air
conditioned environment, trolleys, big size stores have
resulted in a good infrastructure which has brought
customers in organised retail outlets. This is definitely
distinctive and attractive as compared to the traditional
retailers. In this infrastructure Customers never feel
bored or tired while purchasing leading to higher
purchases by them.
02
Prastuti: Vol. 3, No. 1, July 2014
Importance of Services in Organised Retail - An Empirical Study
03
Service: Services provided to customers are one very
essential factor which leads to more number of customers
to an organisation. As customers one can easily deduce
that customer service provided by the organised retailers
have been better as compared to the traditional retailers
in India. Since their starting organised retailers have used
customer service as one of the important tool to attract
new and retain existing customers. Organised retailers
have also used technology as a tool to differentiate their
services as compared to the traditional retailers. Use of
optical scanners at billing counters has made the billing
process faster. They have used the services not only to
differentiate but also to add value in the shopping
experience of the customers. Provision of free alterations
in garments, personal attention provided to customers by
sales staff to help and assist if required has definitely
added higher value in the shopping experience.
The Indian customers are very busy in their office & house
hold activities due to which they are in lack of time
particularly in big cities. The services offered by the
organised retailers has not only taken care for this rather
they have also tried that the customers do their
purchasing in less time with ease and comfort. Availability
of prams in bigger outlets has increased the ease in
purchasing. Free alteration, free gift packaging, etc. are
some of the other services which are distinctive when we
compare them with the traditional retailers.
Literature Review
The emergence of retailing in India has more to do with
the increasing purchasing power of the buyers, especially
in the post liberalization era (Prakash, 2007). An
improvement could be seen in the quality of life of urban
Indian consumers. The growing affluence of the Indian
middle class, a flood of imported products in the fashion
and food categories, the increasing space for groceries
and the emergence of a new breed of entrepreneurs are
drivers of boom in retail sector of India. (Krishnan &
Venkatesh, 2008). Upsurging Consumerism, changing
lifestyle, increasing access to information and ever
improving technology, made the last decade observe an
enormous development in the retail sector around the
globe (Lahiri & Samanta, 2010). Customers receive
relational benefits from service relationships (Gwinner,
Gremler, & Bitner, 1998). Good service and good selling
help in retaining, enhancing and cementing relationship
resulting in relationship management which finally leads
to competitive advantage for the firm (Kar & Nanda,
Table 4: Rotated Component Matrices of 7 Variables
Extraction Method: Principal Component Analysis; Rotation Method: Varimax with Kaiser Normalization; a. Rotation Converged in 3 Iterations.
Table 5: Naming of the extracted Factors (Loading Criteria>0.4)
Factor No. Statements/ Variables Factor Loading Naming of Factors
1 Personal Attention to Customers 0.483 Basic Services
Customer Relationship Management Practices are good 0.769
Exchange Facility 0.674
The billing procedures are faster 0.510
2 Child Care facility 0.568 Extra Services
Free Alteration 0.687
Free Gift Packaging Facility 0.846
Bibliography
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Perception of Retail Customers-An Empirical Study in
Palakkad District. Indian Journal of Marketing,
24-29.
• Dalwadi, R., Rathod, H. S., & Patel, A. (2010, April-
August). Key Retail Store Attributes Determining
Consumers' Perceptions: An Empirical Study of
Consumers of Retail Stores Located in Ahmedabad
(Gujrat). SIES Journal of Management, 7(1), 20-34.
• Das, G. (2011, July). Effect of Retail Sales Promotion
on Buying Behaviour of Customers: An Empirical
Study. Indian Journal of Marketing, 25-35.
• Gwinner, K. P., Gremler, D. D., & Bitner, M. J. (1998).
Relational Benefits in Services Industries: The
Customer's Perspective. Academy of Marketing
Scince, 26(2), 101-114.
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Constitute Customer andBrand Loyalty. Journal of
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Challenges of Merchandising Strategies in Fashion
Retailing - A Study on Private Labels Vs
Manufactured Brands. Indian Journal of Marketing,
14-21.
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Purchase of Apparels from Organized Retail Outlets.
The IUP Journal of Marketing Management, IX(1&2),
73-87.
• Misra, A., & Khan, M. Y. (2008, March). FDI in
Retailing. Indian Journal of Marketing, 22-29.
• Patil, P. P., & Vedak, V. (2011, February). The Private
Label: Retailer's Value Proposition and Strategic Tool
of Differentiation. Indian Journal of Marketing,
54-60.
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Overview. The Management Accountant, 42(10),
764-66.
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Customer Relationship Marketing Practices in
Organised Retailing in Food and Grocery Sector in
India: AnEmpirical Analysis. VISION-The Journal of
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Study On Consumer Perception About Organized Vs
Unorganized Retailers at Kanchipuram, Tamil Nadu.
Indian Journal of Marketing, 11-23.
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• Zeithmal, V. A. (2000). Service Quality, Profitability
and the Economic Worth of the Customers: What we
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11-28
Importance of Services in Organised Retail - An Empirical Study
07
Volatility plays a very important role in any financial market around the world. Accurate forecasting of volatility is essential for taking wise and timely decisions for transacting financial products and to manage other financial applications. The goal of any volatility model is to be able to forecast volatility. In this paper “VOLATILITY FORECAST OF BSE LTD. BROAD INDICES”, focuses on volatility forecasting through three widely used time series volatility models namely, the Historical Variance, time series of univariate data, the Generalized Autoregressive Conditional Heteroscedastic Model (GARCH) and the Risk Metrics, Exponential Weighted Moving Average (EWMA) . The characteristics of these volatility models are explored using monthly data on the BSE broad indices for a period of 4 years. (Jan 2010 to Jan 2014). “VOLATILITY FORECAST OF BSE LTD. BROAD INDICES”, analysis through GARCH(1,1) of BSE S&P, BSE MIDCAP, BSE SMALL CAP, BSE 100, BSE 200 and S&P 500 have shown the volatility ranging from 1.52 to 6.87%, whereas the same indices through Exponential Generalized Autoregressive Conditional Heteroscedastic Model (EGARCH )model has shown the volatility range from 4.55 to 10.59%.
Keywords: Volaitity forecast, BSE broad indices, Time series, Generalized Autoregressive Conditional Heteroscedastic Model (GARCH), Risk metrics, Exponential Weighted Moving Average (EWMA)
Volatility Forecast of BSE Ltd., Broad Indices
Abstract
Introduction
The paper entitled “VOLATILITY FORECAST OF BSE LTD.
BROAD INDICES” attempts to present the volatility
forecast of the BSE broad indices for a period of one year
from Jan 2014. The six BSE broad indices are widely
chosen by the investors and forecasting volatility for the
same carries significance for investment decisions.
Hence the study is focused on forecasting the volatility of
BSE S&P SENSEX, BSE SMALL CAP INDICES, BSE MID CAP
INDICES, BSE 100, BSE 200 AND BSE 500 INDICES. BSE
was established in 1875, BSE Ltd. (formerly known as
Bombay Stock Exchange Ltd.), which is presently Asia’s
first Stock Exchange and one of India’s leading exchange
groups. Over the past 137 years, BSE has facilitated the
growth of the Indian corporate sector by providing it an
efficient capital-raising platform. More than 5000
companies are listed on BSE making it world's No. 1
exchange in terms of listed members. The companies
listed on BSE Ltd command a total market capitalization
of USD 1.32 Trillion as of January 2013. It is also one of
the world’s leading exchanges (3rd largest in December
2012) for Index options trading (Source: World
Federation of Exchanges).
Research Methodology
• Source of Data: The data is collected from the
bseindia.com and analyzed by using the NUMXL
software Excel addin.
• Objective: To find out the BSE broad indices
volatility.
• Study period: Period of 4 years from 2010 January
to 2014 January is taken.
• Techniques used:
• Log returns: log returns are calculated for the
Dr. Y. V. Ramana Murthy*Dr. K. Kameshwari**
*Asstt Prof, Centre for Management Studies, NALSAR University of Law, Hyderabad. E-mail: [email protected]**Asstt Prof, Integral Institute of Advanced Management, Visakhapatnam, AP, India. Email:[email protected]
08
monthly returns which can provide better values
distribution prices between January 2010 and July
2014.
• WMA: A Weighted Moving Average (WMA) assigns a
weighting factor to each value in the data series
according to its age. The most recent data gets the
greatest weight and each price value gets a smaller
weight as it counts backward in the series.
• EWMA: is computed to estimate the next-day (or
period) volatility of a time series and closely track the
volatility as it changes. EWMA is basically a special
form of an ARCH() model where the ARCH order is
equal to the sample data size and the weights are
exponentially declining at rate throughout time.
(lambda 0.94).
• Correlogram: To find out the ACF and PACF to
understand the lag order position and decide the
model.
• EGARCH (1,1): Volatility forecasting through
econometric models have gained wide popularity.
Egarch analysis, the exponential general
autoregressive conditional Heteroscedasticity
(model by Nelson (1991) is another form of the
GARCH model . The exponent ia l genera l
autoregressive conditional heteroskedastic (E-
GARCH) model by Nelson (1991) is another form of
the GARCH model. Formally, an EGARCH(p,q):
Where:
is the time series value at time t.
is the mean of GARCH model.
is the model's residual at time t.
is the conditional standard deviation (i.e. volatility)
at time t.
is the order of the ARCH component model.
are the parameters of the ARCH
component model.
is the order of the GARCH component model.
are the parameters of the GARCH component
model.
are the standardized residuals:
is the probability distribution function for .
Currently, the following distributions are supported:
Normal distribution P_{\nu} = N(0,1)
Student's t-distribution
Generalized error distribution (GED)
The E-GARCH model differs from GARCH in several ways.
For instance, it used the logged conditional variances to
relax the positiveness constraint of model coefficients.
EGARCH (p,q) model has 2p+q+2 estimated parameters.
EGARCH_VL (alphas, betas, innovation, v)
Alphas are the parameters of the ARCH(p) component
model (starting with the lowest lagi).
Betas are the parameters of the GARCH(q) component
model (starting with the lowest lag).
Innovation is the probability distribution model for the
BSE SMALL CAP 0.00 0.99 -0.26 -0.34 TRUE TRUE FALSE
Target 0.00 1.00 0.00 0.00
SIG? FALSE FALSE FALSE FALSE
BSE 100 0.00 0.94 0.09 -0.08 TRUE TRUE FALSE
Target 0.00 1.00 0.00 0.00
SIG? FALSE FALSE FALSE FALSE
BSE 200 0.00 1.131 0.777 1.086 FALSE TRUE FALSE
Target 0.00 1 0 0
SIG? FALSE FALSE TRUE FALSE
Egarch(1,1) Garch(1,1) Egarch(1,1) Garch(1,1)
BSE S&P 4.85% 5.40% 16.80 18.71%
BSE MIDCAP 10.59% 6.02 36.68% 20.85
BSE SMALL CAP 9.36% 6.87 32.42% 23.80
BSE 100 4.88% 5.54 16.90% 19.19
BSE 200 5.14% 5.48 17.81% 18.98
S&P 500 4.55% 1.52 15.76% 5.27
Graph 19: BSE S&P SENSEX
4.00%
5.00%
6.00%
7.00%
1 2 3 4 5 6 7 8 9 10 11 12
STD
TS
32
Prastuti: Vol. 3, No. 1, July 2014
4.50%
4.70%
4.90%
5.10%
1 2 3 4 5 6 7 8 9 10 11 12
STD
TS
7.00%8.00%9.00%
10.00%11.00%
1 2 3 4 5 6 7 8 9 10 11 12
STD TS
9.00%
9.50%
10.00%
10.50%
11.00%
1 2 3 4 5 6 7 8 9 10 11 12
STD TS
Graph 20: BSE MIDCAP
Graph 21: BSE SMALL CAP
Graph 22: S&P500
Graph 23: BSE 100
4.70%
5.20%
5.70%
1 2 3 4 5 6 7 8 9 10 11 12
STD
TS
33
Volatility Forecast of BSE Ltd., Broad Indices
0.05141
0.051412
0.051414
0.051416
0.051418
0.05142
1 2 3 4 5 6 7 8 9 10 11 12
STD
TS
Conclusion
The analysis through GARCH (1,1) and EGARCH (1,1)
forecasted volatility of the selected BSE BROAD indices
and indicated BSE MIDCAP and BSE SMALL CAP has
highest volatility. GARCH (1,1) model has shown low
volatility than the EGARCH (1,1). Volatility forecasting
through econometric techniques presents the forecast
based on the past data, however, the volatility of stock
markets are affected by many exogenous variables which
are highly unpredictable. This analysis attempts to
present risk metrics which helps to manage risks such as
to measure the difference in actual and expected
volatility which can act as an effective hedging tool,
portfolio diversification and overall risk management.
References
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Stock Market Volatility in India: A Comparison of
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Forecasting UK stock market volatility, Applied
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asset returns: a new approach, Econometrica, 59,
349–70.
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193–202.
Graph 24: BSE 200
34
Prastuti: Vol. 3, No. 1, July 2014
The economic reforms of 1991 have completely changed the scenario in which business is being done in India. The reform policies include opening-up for international trade and investment, deregulation, initiation of privatization, tax reforms, and inflation-controlling measures. This has been done to integrate the Indian economy with the world economy. The rise of business over the internet is one of the outcomes of such economic reforms. The advancement in Information Technology (IT) also helps the e-commerce to grow rapidly. This paper extends the research on e-commerce in India. We try to analyze how IT infrastructure acts as a barrier to e-commerce. The paper uses a survey based approach to draw the conclusions. Using data from 300 respondents, we came to the conclusion that Internet unavailability, slow access of internet, security concerns and the transaction process are the major concerns exist. The paper shows the impact of these factors on consumer satisfaction on e-commerce. Finally, we try to give some suggestions to improve the IT infrastructure so that e-commerce business can achieve their potential.
Keywords: E-commerce, IT Infrastructure, India, Internet.
Analysis of it Infrastructure As A Factor AffectingE-commerce and its Impact on Consumer Satisfaction
Abstract
Introduction
With the advancement in the Information Technology
and the explosive increase of Internet users, companies
all around the globe saw this development as an
opportunity to reach to their customers. They have been
shifting from the traditional offline mode of transaction
to the latest new online mode of transaction. The
concept of online transaction relates to e-commerce as a
practice of buying and selling products over the internet
(Lee, 2008). In the present era of Globalization and the
dot-com burst, E-commerce business has grown
significantly. The geographical distance between buyer
and seller offers no problem in doing business.
According to a survey the India’s e-commerce market is
of $16 billion in year 2013 and is expected to reach
Rs 1,07,800 crores (US$ 24 billion) by the year 2015 and
further expected to reach $56 billion in year 2023 as per
survey conducted by industry body ASSOCHAM [W1]. So
the e-commerce industry in India is growing day by day
on a rapid rate. India is currently third largest internet
user in the world and expected to become the second
with 243 million internet user by June, 2014 as per
report of I-Cube 2013 report [W2] (Internet and Mobile
Association of India (IAMAI) and IMRB International).
With the technological advancement in the Mobile
telephony the 3G and 4G services which provide a fast
access to the internet is also going to increase and also
going to increase the users day by day. By 2015 India 4G
services is projected to be 28 million source AVENDUS
[W3]. More is the users on Internet; more is the
opportunity for e-commerce.
E-commerce provides ease and convenience to the
users. Consumers can enjoy benefits such as availability
From the above analysis we find that the result is not
reliable. The value of F is .61739 which is greater than .10
at 90% level of confidence.
Hence we can say that the absence of virtual keyboard
does not pose any impact on the customer satisfaction
while transacting with the e-commerce websites.
*Significant at 90% level of confidence
From the above analysis we find that the result is not
reliable. The value of F is .88893 which is greater than .10
at 90% level of confidence.
Hence we can say that the feedbacks provided by the
users on the e-commerce websites do not pose any
impact on the customer satisfaction while interacting
with the e-commerce websites.
Findings
If we don’t know the problem, we can’t find the solution.
In order to satisfy the customer after they visit and
transact from any e-commerce website, companies must
focus on the problems the customer faced. The main
problem of the customer is regarding the payment. Hence
we try to find out the various problems regarding
payment in our research work.
From the data collected, the following are some of the
problems:
42
Prastuti: Vol. 3, No. 1, July 2014
SUMMARY OUTPUT
ANOVA
0
20
40
60
80
100
120
140
160
180
Some banks Credit/Debit
card accepted
Absence of virtual
keyboard
Different regulation regarding e signature
Server reliability
Series1
What are the problems customer face regarding payment?
It is essential for e-commerce companies to know about
the customers visit and buying pattern. Also they must
focus on the products which the customer usually buys.
In the discussion of customer satisfaction these things
should be keep in mind.
Clothing
Gadgets
Crockrey
Furniture
Electronics
Clothing
Gadgets
Crockrey
Furniture
Electronics
37%
26%
9%
8%
21%
0 44 88 132 176 220
What do you usually buy from online stores?
43
Analysis of it Infrastructure As A Factor Affecting E-commerce and its Impact on Consumer Satisfaction
Recommendations
The customer satisfaction is required for e-commerce
business to cherish. A satisfied customer would surely
visit the e-commerce website again. To satisfy the
customer:
1) E-commerce companies must refresh their IT
infrastructure.
2) Companies must focus on improving the Transaction
process on their websites.
3) Companies must have to choose the server which is
reliable and trustable.
4) E-commerce websites must be secured. A vulnerable
website may be attacked and can be hacked easily.
The role of government can prove to be very crucial in the
success of e-commerce in India. From the research it is
clear that low network connectivity and speed or slow
accesses of internet are among the crucial factors behind
the customer satisfaction. The government should focus
on the following areas:
1) Must aim to provide access of faster internet through
broadband and wi-fi channels.
2) Improving the mobile telephony services like 3G etc.
3) Improving the network connectivity in remote areas.
4) Investment in maintaining the network towers
throughout the country.
According to the 2011 Census data, only 3.1 percent of
total houses have Internet access in India. Chandigarh
(U/T) has the highest 18.8% of total households Internet
users, followed by NCT of Delhi (U/T) 17.6% and Goa
12.7%. Bihar has below 1% of total households Internet
users which is the lowest in India. Other states like
Maharashtra have 5.8%, Uttar Pradesh has 1.9% and West
Bengal has 2.2% of total households Internet density only.
[W6]
The government must target to increase the percent of
total houses that have internet access in India. For this a
lot of investment is needed in the IT field in improving the
IT infrastructure.
Conclusion
As per the research performed, Low network
connectivity, speed or slow accesses of internet,
transaction process and security issues relates to the
satisfaction of the customer. By improving on these
factors, more customer satisfaction can be achieved.
Efforts from both the e-commerce companies and the
government are required to work on these factors. IT
infrastructure refreshing is required. The e-commerce
business which is expected to reach Rs 1, 07,800 crores
(US$ 24 billion) by the year 2015 is one of the important
contributor to the economy of the nation. The focus of the
government must be to improve internet connectivity
and availability of network. They must also focus on
improving the IT education in our country. The U.P
government free laptop scheme can be seen as a step
towards making the state IT centric state and improving
the IT infrastructure in the state. It is essential for our
country to find the impact of e-commerce on their
economies and hence try to create a policy and
environment that favors the growth and development of
e-commerce.
44
Prastuti: Vol. 3, No. 1, July 2014
References
• Lee, I. (2008) “E-business models, services, and
communications”
• Tugrul U. Daim; Matthew Letts, Mark Krampits,
Rabah Khamis and Pranabesh Dash; Mitali Monalisa
and Jay Justice, USA (2011) IT infrastructure refresh
planning for enterprises: a business process
perspective.
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Web References
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India (Assocham)
http://www.techgig.com/tech-news/editors-
pick/India-s-e-commerce-market-rose-88-in-2013-
Survey-20923
• http://www.iamai.in/PRelease_detail.aspx?nid=
3222&NMonth=11&NYear=2013
• htt p : / / w w w. a v e n d u s . co m / F i l e s / Fu n d % 2 0
Performance%20PDF/Avendus_ReportIndia%27s_
Mobile_Internet-2013.pdf
• http://en.wikipedia.org/wiki/ Information_
technology_management
• http://en.wikipedia.org/wiki/Jakob_Nielsen_%28
usability_consultant%29
• http://updateox.com/india/state-wise-internet-
users-in-india-census-2011/
45
Analysis of it Infrastructure As A Factor Affecting E-commerce and its Impact on Consumer Satisfaction
We’re aware about organizations across the globe struggling with how best to introduce social networking tools - blogs, micro blogs like Twitter, Collaboration platforms like Facebook to internal audiences. Social networking has always been stated for distracting employees but with its proper and regulated use, it can have the obverse effect. Whether it's Facebook or Twitter or any other social networking channel, these networks help in improving communication between an employer and the employees, as well as employees and their colleagues. Social networking provides a medium of receiving immediate feedbacks in forms of appreciation and criticism which can help employees engage with fellow team-mates and even customers.
Keywords: Social Networking, Employee Engagement
Impact of Social Networking on Employee Engagement at Workplace: An Empirical Study Based on IT Industry in India
Abstract
Introduction
William A Kahn (Kahn, 1990, pg 692, Academy of
Management Journal) while explaining engagement and
disengagement at work and the psychological conditions
involved explains that “people can use varying degrees
of their selves physically, cognitively, and emotionally in
work role performances, which has implications for both
their work and performances.” Employee engagement is
harnessing the organization member selves’ to their
work roles.
The psychical, emotional dimension deals with the
credence as well as perception of employees about their
workplace, its leaders and the work culture. It also takes
into account that whether the employees have a positive
or a negative proclivity towards the organization and its
leaders. The physical dimension of employee
engagement relates to the consistency of work and
effort maintained by the employees to perform their
roles.
Although it has been acknowledged that “employee
engagement is a multi-faceted construct”, as previously
suggested by (Kahn 1990), (Truss et al 2006) define
“employee engagement simply as ‘passion for work’, a
psychological state which encompasses the three
dimensions of engagement discussed by (Kahn 1990),
and captures the common theme running through all
the definitions” (CIPD report-Working Life: Employee
Attitudes and Engagement, (Truss et al 2006)).
We’re familiar to the fact that man is a social animal and
with the coming of age, the social networking going
online and virtual instead of the traditional and actual
face to face communication, had a huge impact on the
Bhavya Mathur*Divyanhsu Ojha**
Dr. Shailendra Kumar***
*&**Student, MBA (IT), Indian Institute of Information Technology, Allahabad, UP (India). Email: [email protected] & [email protected]***Asstt. Prof., MBA (IT), MSCLIS Division, Indian Institute of Information Technology, Allahabad, UP (India). Email: [email protected]
temperament of those working and particularly of those
working under stress.
Social networking involves the use of an online platform
or website that helps people to communicate, for a social
or organizational purpose, through a variety of services,
most of which are web-based. As this is a relatively new
phenomenon and there is no common international
regulatory body, it is difficult to find an official or
Though no one likes or wants a recession. But, in the age of globalization, no country can remains isolated from the fluctuations of world economy. Heavy losses suffered by major International Banks affect all countries of the world as they have their investment interest in almost all countries. So, what is the reality for countries like India? This study aimed to stand on the opinions of relevant stakeholders in the field of corporate financial reporting practices after economic crisis in India. A questionnaire is structured and analyzed by principal component analysis. As a result of the economic downturn, the overall impact of the global financial crisis has been felt in India in terms of the corporate financial reporting is more susceptible. In the opinion of stakeholders there is need to apply global reporting practices to smoothen the corporate’s working and for making the system more transparent.
Impact of The Economic Crisis on Corporate Financial Reporting: Stakeholders’ Perceptions
Abstract
Preamble
The current crisis is different from the Great Depression
of the 1930’s. While the earlier downturns were the
result of a slowdown in demand, the crisis of 2008 has a
different basis. It originated not in a slowdown in
demand but a financial crisis which triggered a crisis of
trust between borrowers and lenders and therefore a fall
in the asset prices. This led to massive bankruptcies in
various financial and production units. Thus unlike an
earlier ones, it is a crisis created on the supply side.
Subsequently, it has also manifested itself as a demand
side problem with unemployment and housing
foreclosures rising in the US (Kapila, 2009).
A global recession is a period of global economic
slowdown. The International Monetary Fund (IMF) takes
many factors into account when defining a global
recession, it states that global economic growth of 3% or
less is "equivalent to a global recession". Recession is a
period of general economic decline, defined usually as a
contraction in the GDP for six months (two consecutive
quarters) or longer. Subprime mortgage is a class of
mortgage used by borrowers with low credit ratings.
Borrowers who use subprime loans generally do not
qualify for loans with lower rates because they have
damaged credit or no credit history, and are thus
considered risky by lending agencies. Because the
default risk for poor credit borrowers is greater than of
other borrowers, lenders charge a higher interest rate on
subprime loans. Depression can be explained as a bad,
depressingly prolonged recession in economic activity. A
slump is where output falls by at least 10%; a depression
is an even deeper and more prolonged slump (Kumar,
2011).
Hina Agarwal*
*Lecturer, Department of Commerce, Baikunthi Devi Kanya Mahavidyalaya, Agra University, Agra.Email: [email protected]
53
Recession, in lay-man terms, is the time when there is
economic decline, leading to a slowdown in trade and
economic activity. This is generally identified by a fall in
Gross Domestic Product (GDP) in two or more
consecutive quarters. Normally, when consumers lose
confidence in the growth of the economy and start to
spend less, there is a decrease in demand for goods and
services. This, in turn, leads to a decrease in production.
On the other hand, the profit margin of companies is due
to a rise in costs and they try cost cutting measures. The
equity / stock markets react negatively to this. A lay-off
(asking people to leave) leads to a rise in the
unemployment rate and a decline in real income (Sen &
Johnson, 2011).
The US has witnessed over 11 recessions so far, since the
end of the World War II. From 1930 to 1939, the US saw
the Great Depression, which began with the Wall Street
Crash of October, 1929 and rapidly spread worldwide.
Most analysts believe the causes to be the lack of high-
growth new industries, high consumer debt and bad loans
given out by banks and investors.
In 2008, defaults on sub-prime mortgages (home loan
defaults) led to a major crisis in the US. Banks had given
out loans without researching on the payback power of
the clients. With increasing defaulters, the banks went
into bankruptcy. It was called the sub-prime crisis since it
began from high risk debt offered to people with poor
credit worthiness or unstable incomes (Sen & Johnson,
2011).
Review of Literature
Barth and Landsman (2010) concluded that fair value
accounting played little or no role in the Financial Crisis.
They also concluded that because the objectives of bank
regulation and financial reporting differ, changes in
financial reporting needed to improve transparency of
information provided to the capital markets likely will not
be identical to changes in bank regulations needed to
strengthen the stability of the banking sector.
Pal (2010) explained the global economic crisis - due to its
unusual nature - has meant that auditors have to be very
aware of the prime importance of judging different risks
when assessing companies. This is especially true with
regards to the ‘going concern concept.’ The judgment of
these risks is a more complicated problem - and a serious
challenge for the auditor - during a period of crisis.
However, professional terms such as audit standards, the
principles of quality assurance, and methodological
recommendations are available. Therefore, any problems
can be solved though not easily.
Giannarakis and Theotokas (2011) evaluated the effect of
financial crisis in Corporate Social Responsibility (CSR)
performance. An empirical analysis is conducted, based
on companies that implement Global Report Initiatives
(GRI) reporting guidelines modifying the application level
in a point score system. Totally, 112 companies were
included in the GRI report list in 2007, pre-financial crisis,
2008, 2009 and 2010. The Wilcoxon signed rank sum test
Mean Value 3.909091 3.863636 4.151515 4.19697 4.015152
Median Value 4 4 4 4 4
Mode Value 4 4 4 4 4
Impact of The Economic Crisis on Corporate Financial Reporting: Stakeholders’ Perceptions
63
Overall, the principal component analysis reveals an
important result indicating that appropriateness of
financial information of Indian companies factor was
considered as one of the important factors in making a
judgement and decision whether to make investment in
Ind ian companies . The ranking pos i t ion of
appropriateness of financial information of Indian
companies’ factor as the second most important factor.
Moreover, it is also expected that the proportion of
stakeholders influenced by this factor would be relatively
high. This is confirmed by figures on Table 4, whereby high
percentages of influence are evidenced for all the five
variables constituting under appropriateness of financial
information of Indian companies factors (Q9 = 80.60%,
Q14 = 75.36%, Q16 = 82.09%, Q17 = 97.10% and Q24=
73.91%).
Concluding Remarks
The paper was aimed to provide an initial insight to the
expectations of the different groups of shareholders on
corporate financial reporting practices by considering 24
fundamental factors regarding current reporting
practices.Addressing the objective of this paper might
increase the understanding of the attitude of different
stakeholders on the idea of financial reporting and its
disclosure within the annual report. This includes primary
(investors) as well as the secondary (public at large)
stakeholders' perceptions. The perceptions of
stakeholders were focused in this paper to identify the
most demanding group of stakeholders in expecting the
companies' actions in corporate financial reporting
disclosure practices. Besides that, this study can guide the
preparers of annual reports to improve on the quantity
and quality of the corporate financial reporting practices.
The regulators also can revalue the current practices of
corporate financial reporting in India and make it
mandatory for companies to disclose the relevant
reporting issues.
Thus a recession in one country will potentially have large
scale impacts on other countries to an extent not seen in
previous recession. The paper concludes that the regional
dimension provides an important and effective
framework – not just for mitigating the impact of the
current crisis but also for reducing the chances of similar
crises in the future
References
• Alwan, B. Mohammed (2012). Financial crisis and its
impact on accounting and international accounting
standards. Interdisciplinary Journal of Contemporary
Research In Business. 3(10), 998-1017.
• Barth, Mary E. and Landsman, Wayne R., (2010). How
did Financial Reporting Contribute to the Financial
Crisis? European Accounting Review 19(3), 399-423.
Rock Center for Corporate Governance at Stanford
University Working Paper No. 79. Available at SSRN:
http://ssrn.com/abstract=1601519
• Casey, Kathleen L. (2009). Lessons from the financial
crisis for financial reporting, standard setting and
rule making. Presented in financial executives
international's 28th annual current financial
reporting issues conference, New York, retrieved from
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spch111709klc.htm
• Giannarakis, Grigoris and Theotokas, Ioannis (2011).
The effect of financial crisis in corporate social
responsibility performance. International Journal of
Marketing Studies, 3(1), 2-10.
• Gileva, T. (2010). Econometrics of crude oil markets,
Thesis submitted to the Department of Economics,
University of Paris.
• Kapila, Uma (2009). Indian economy: performance
and policies (9th ed.). New Delhi, Academic
Foundation.
• Kumar, Nidhi Arora (2011). Impact of global recession
on Indian it industry and effectiveness of e-business in
the era of recession. Global Journal of Business
Management and Information Technology. 1 (1), 9-
25.
• MATLAB 7.10.0 Release 2010
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131-142.
• Saxena, S. P. and Bhadauriya, S. (2012). Principal
component analysis of macroeconomic determinants
of stock market dynamics: some reflections from
national stock exchange of India ltd. Transformation
and survival of business organizations: challenges
and opportunities. 97-105.
• Sen, Sohini&Johnson, Shilpa (2011). Primer:
Recession and impact on India. Retrieved from
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markets/primer-recession-and-impact-on-india-
111080800134_1.html
Stock market is one of the most important sources for companies to raise money. It allows businesses to be publicly traded, or raise additional capital for expansion by selling shares of ownership of the company in a public market. History has shown that the price of shares and other assets is an important part of the dynamics of economic activity, and can influence or be an indicator of social mood. An economy where the stock market is on the rise is considered to be an upcoming economy.
Stock market dynamics or volatility refers to the variation in the stock price changes during a period of time. The volatility of stock market indicators goes beyond anyone’s reasonable explanations. Generally, variations in stock market are caused by the fluctuations in the performance of the economy or the macroeconomic indicators of an economy. The modeling of stock market volatility is one of the key areas of present financial research as stock market is the main determinant of economic development of a country. The present paper is intended at developing a dynamic model of macroeconomic determinants of stock market volatility via a causal loop diagramming.
revenues) may have implications for the increase of gold
prices. This holds true as long as gold accounts for a
significant part in the asset portfolio of oil exporters and
oil exporters purchase gold in proportion to their rising oil
revenues. Therefore, the expansion of oil revenues
enhances the gold market investment and this causes
price volatility of oil and gold to move in the same
direction. In such a scenario, an oil price increase leads to
a rise in demand and hence prices of gold. If there is hike in
the prices of crude oil in international market, then the
import prices for India automatically raised as India is one
of the major importer for crude oil market and it will
adversely affect the account of balance of payments.
Gold Prices (GLD): GLD has two positive causal links to
SMR and SLV with positive polarities. Gold prices are
highly dominated by the changes in the international
market and fluctuate in a very intensive manner with the
variations in the international commodity market.
Investors are mostly interested in the assets with low
price and high returns. Thus, when the gold prices are on
the increasing, they generally move their investments to
the stock market. Inflation channel is the best to explain
the linkage between gold and silver markets. A rise in gold
price leads to an increase in the general price level. When
the general price level or inflation goes up, the price of
silver, which is also a good, also increase. On the other
hand, gold and silver prices sometimes fluctuates due to
changes in demand for jewelry.
Conclusion
The paper presents a logically structured framework for
interrelationship among the stock market returns and the
macroeconomic determinants, which can be helpful for
additional researches for developing non-linear modeling
techniques such as System Dynamics, Fuzzy-Neural
Networks, Fuzzy Asymmetric GARCH model, Hidden
Markov Models, Wavelet Neural Networks etc.
Investment in stock market is a science wherein an
investor should carry out a detailed enquiry before
investing. The research is aimed at developing and
following a scientific approach to understand the
behavior of stock market. The paper could work as an
investment guide with comprehensive and in-depth
knowledge on stock market investing for them.
Understanding the role of economic indicators that
determine market performance as well as analysis of their
impact on the market, are essential skills for the finance
researchers. From time to time, domestic and
international economic data are released, which impact
the financial markets. This research makes available a
broad and wide description of macroeconomic indicators
impacting stock market behavior, interpretation of the
same and also the application of various techniques for
analyzing the impact.
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70
Prastuti: Vol. 3, No. 1, July 2014
NR
TS
GD
P
IIP
WP
I
BO
P
FXR
E
FXR
A
RP
R
TBR
PLR
FII
TRV
MC
P
CR
O
GLD
SLV
NRTS + + +
GDP + + + + + +
IIP + + - + + + + +
WPI + + + + +
BOP + - +
FXRE - +
FXRA - - -
RPR - -
TBR - -
PLR - - -
FII + - + +
TRV + +
MCP + +
CRO + + + +
GLD + +
SLV
Notes: ‘+’ and ‘-’ shows the polarity of causal loops.
Appendices
Figure 1: Causal Loop Diagram of Macroeconomic Determinants of Stock Market Volatility
Table 1: Causal Loops Matrix for all variables
71
Causal Loop Modeling of Macroeconomic Determinants of Stock Market Volatility
72
Prastuti: Vol. 3, No. 1, July 2014
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