Indian Manufacturing Sector Research Articles

Determinants of Share Return of Manufacturing Sector in India: A Panel Data Technique

Purpose: The present study examines the factors of share returns by analysing seventy manufacturing sector companies covered in NSE 100 Index of Nifty. Methodology: In order to determine the share return of manufacturing sector companies, ten fundamental factors have been taken into consideration viz.,earning per share (EPS), trading volume, age of the firm,dividend yield percentage (DY%),size (total assets), investment opportunitymeasured as price to book value  ratio (P/B), firm risk measured through price earnings ratio, growth (percentage change  in sales), dividend per share (DPS) and earning volatility (EV) respectively for consecutive ten years (2008-2017). The multiple impacts of each determinant have been regressed by employing three models of Panel Data Analysis. Findings: The study reveals that factors such as Profitability (EPS), Firm risk (P/E ratio), Dividend (DPS), Investment Opportunities (P/B ratio) and Size (Total Assets) have significant effect on share return whereas Dividend Yield percentage (DY%) has negative nexus with share return. Originality: This study had a plagiarism of nine percent. All the other content of this study is composed by the author and all references have been duly provided.

Evaluation of key enablers of green supply chain management in Indian manufacturing industries: a fuzzy approach

Manufacturing industries are an indispensable source for a nation's financial development; however, those industries are also a major source of increasing environmental issues. The situation is no different in India. Recently, green supply chain management (GSCM) is emerging as a key strategy that can reduce the negative impact on the environment. Indian manufacturing industries lag in implementing GSCM. This research highlights the different key factors that affect the execution of GSCM in the Indian manufacturing sector. Further, the fuzzy DEMATEL framework is established to prioritise the key factors and to establish a cause and effect relationship among the factors. The results of this study uncover that 'Environmental regulation and support factor' gains the dominant position among the main factors. Moreover, sub-factors like 'green innovation motivation', 'consumers' awareness about the environment', 'market competition', and 'reverse logistic adoption cost' create the highest impact on the execution of GSCM practices in Indian manufacturing firms.

Causes of Excess Capacity in Indian Manufacturing Sector

Causes of Excess Capacity in Indian Manufacturing Sector

Insightful implementation of lean tools to cultivate lean culture in a small scale manufacturing organisation - a case study

Small and medium-scale organisations are the backbone of the Indian manufacturing sector. Awareness and proper use of the lean approach can improve their productivity. This paper demonstrates insightful use of some of the lean tools to a small subcontractor organisation; for improvement in its current process with less expenditure. The second objective was to develop an attitude among production people for waste-free practices through innovative ideas. To achieve these objectives, the current state VSM was prepared to identify wastes in the process. Kaizen, pacemaker, PEEP, and two-Bin Kanban system were used to achieve the ideal process. By implementing these tools, the total cycle time for one rotor assembly is reduced by 37.12%, the total lead time is reduced by 7.1%, and inter-departmental material movement per day is reduced by 37.5%. This paper will motivate researchers and practitioners to develop specific but effective solutions with knowledge of lean philosophy.

AI-Driven Predictive Maintenance in Indian Manufacturing: Enhancing Operational Efficiency

This paper explores the application of Artificial Intelligence (AI) in predictive maintenance within the Indian manufacturing sector. Predictive maintenance leverages AI techniques like machine learning (ML) and deep learning (DL) to predict equipment failures, thus reducing downtime and operational costs. In India, where manufacturing plays a critical role in the economy, the adoption of AI-driven predictive maintenance is still in its early stages. The paper discusses various ML models, such as Decision Trees and Recurrent Neural Networks (RNN), used to predict machinery failures based on historical data and real-time monitoring. The research includes case studies from Indian manufacturing firms that have implemented AI-based predictive maintenance systems, showcasing improvements in machine uptime, maintenance scheduling, and cost-efficiency. The study also highlights the challenges of integrating AI into traditional manufacturing processes, such as data quality, infrastructure limitations, and resistance to change. Finally, the paper offers insights into how Indian manufacturers can scale these solutions to achieve long-term benefits and maintain global competitiveness.

Linking Performance Management Systems (PMS) With Organizational Development (OD)

The relationship between human resource practices and organizational performance has been extensively researched throughout the year. Performance management has been recognized as the most important tool and critical component of HR practices for an organization. In literature, the outcome is blurring the relationship between the performance management system and organizational development. On this basis, this study is going to establish a relationship between the performance management system (PMS) and organizational development (OD) in the manufacturing sector in India. The data have been evaluated descriptive statistics, factors analysis, and regression through SPSS 22.0. The findings demonstrate that using PMS, such as ‘organizational vision and mission', ‘employee participation', and ‘pay for performance' have a positive link with organizational development.

Revisiting mean reversion in profitability and earnings: evidence from India (2007–2020)

PurposeThe purpose of this article is to revisit the mean reversion in profitability and earnings among Indian-listed firms, based on the idea that changes in profitability and earnings are somewhat predictable.Design/methodology/approachThe study used a sample of 445 Bombay Stock Exchange (BSE)-listed companies and 309 companies from the manufacturing sector in India for the period from 2007 to 2020. The study employed cross-sectional regressions. Both linear and non-linear Partial Adjustment Models (PAM) were used to forecast profitability and earnings.FindingsThe study revealed that profitability and earnings mean revert for both the BSE-listed companies and the manufacturing sector companies from 2007 to 2012. However, for the years from 2013 to 2020, it was found that there is no significant evidence of mean reversion in both the BSE-listed companies or the manufacturing sector companies.Practical implicationsThe findings have larger implications for security analysts who forecast future stabilisation or recovery of historically high or low growth rates. Investors and analysts would benefit from having a better understanding of how competitive attacks affect profitability as well as how the overall economic growth of a country affects earnings and valuations.Originality/valueMost of the empirical research in India has focused on mean reversion in stock prices or stock returns. The present study looked at the mean reversion of profitability and earnings in Indian firms.

Does GRI compliance moderate the impact of sustainability disclosure on firm value?

PurposeThis paper aims to examine the moderating role of global reporting initiative (GRI) compliance in the association between sustainability reporting and firm value.Design/methodology/approachThis study investigates a sample of 223 manufacturing firms, encompassing 11 industries from 2010 to 2019. Using GRI compliance as a moderator, the authors employed a generalized method of moments model to study how sustainability disclosure impacts firm value.FindingsThe results indicate a positive and significant association between sustainability disclosure and firm value. This study reveals that GRI compliance moderates the relationship between sustainability disclosure and firm value, such that firm value increases when the firm adopts GRI in sustainability reporting.Originality/valueNo prior studies have examined GRI compliance's direct and moderating effects on the association between sustainability disclosures and firm value in the Indian manufacturing sector. This study is also valuable for the managers and industry to understand the significance of implementing voluntary sustainability disclosure practices and being GRI compliant.

Subcontracting: A Stepping Stone for Modernisation or a Survival Strategy for Unorganised Manufacturing Sector in India?

Subcontracting: A Stepping Stone for Modernisation or a Survival Strategy for Unorganised Manufacturing Sector in India?

Does doing good help employees perform well? Understanding the consequences of CSR on industrial sales employees

The pandemic, growing environmental crisis, and social inequalities have increased the attention on the relationship between companies and stakeholders. Corporate social responsibility (CSR) is a critical component of dialogue between companies and their stakeholders. Yet, companies lack guidance on CSR implementation, which is all the more important in the Indian context owing to the implementation of the new CSR law. This study aims to develop a scale for CSR measurement for emerging markets and to use stakeholder perspective to provide a more holistic approach to it. The study employs a multistage method to develop a robust scale, and the items are generated via qualitative research and literature review. The work combines qualitative and quantitative methods to understand how CSR is perceived among sales professionals in the Indian manufacturing sector and develops a six-dimensional scale to measure it. The research also provides a framework to examine the role of CSR on sales professionals' performance and commitment to the job. The impact of a company's CSR performance on employee behavior highlights the significance of doing good. This study prescribes CSR as an additional lever to enhance adherence to organizational values and boost employee morale. This research is important for emerging markets in which CSR is a growing phenomenon.

Characteristics of Enterprises More Likely to Face Constraints in the Unorganised Manufacturing Sector in India

The unorganised manufacturing sector has been facing numerous challenges in spite of its capacity to generate employment. This study analyses the enterprises in the unorganised manufacturing sector in India most likely to face challenges based on different characteristics. The data for the study is extracted from the 73rd Round of National Sample Survey Organisation (NSSO) for the period 2015–2016. The aim is to identify the characteristics of unorganised manufacturing enterprises more likely to encounter problems. Logistic regression techniques have been employed for this purpose. The results show that the larger enterprises, the establishments, are more likely to face problems than the small own-account units. With odds ratios greater than one, rural sector enterprises, registered enterprises, male-owned enterprises, contracting enterprises, enterprises with accounts maintained and enterprises with government assistance have higher risks of problems. Registration status does not reduce the chances of such enterprises encountering problems. Older enterprises are less likely to face problems. Suitable policy measures designed for enterprises with specific characteristics are needed to address the problems of the unorganised manufacturing sector.

Industry Size and Trade Protection in the Presence of Environmental Regulations: An Empirical Investigation of the Indian Manufacturing Sector

AbstractThis paper tests the hypothesis pertaining to the interdependencies between trade and environmental policies in the presence of industry/firm lobbies, which is captured through industry/firm size. For an unbalanced panel of manufacturing firms in India at the five-digit National Industrial Classification (NIC), 2008 for the period 2008–2019, I find that firm size has a positive and significant impact on trade policy. The same holds true for a subset of firms that are polluting in nature (based on the Central Pollution Control Board classification). It is found that larger firms have a greater influence on those trade policies that are set unilaterally by the government. Also, there is no empirical support in favour of trade and environment linkages in the Indian context. This could be due to the fact that these two policies come under the domain of independent ministries of the government. Moreover, environmental safety assumes less significance and tends to adversely affect the competitiveness of the manufacturing sector. Notwithstanding the fact that environmental regulations are in place, the enforcement and monitoring mechanisms are remarkably weak on account of weak environmental institutions.

Global Value Chain Linkages and Employment: Empirical Assessment for India’s Manufacturing Sector

We explore the connection between global value chain linkages and employment outcomes for 17 manufacturing sectors in India utilizing panel long run estimator and short run dynamics for the period 1995–2017. We model this relationship within the production function framework and disentangle two significant outcomes. In the first place, we find that in four varieties of the advancement model, employment and value chain linkages exhibit a long run relationship; that is, they are cointegrated. Second, we find that over the long haul, while forward linkages (DVX), compensation to labourers and industrial economic growth have contributed decidedly to employment in manufacturing sector, while the backward linkages (FVA) have had an unimportant impact. Another striking result in the short run shows that in an emerging economy like India, a rise in forward value chain linkage is directly associated with an increase in relative employment of skilled labour force. We draw significant arrangement suggestions from these findings.

What factors drive industrial plants in emerging economies to adopt ISO 14000 environmental management standards: Evidence from the Indian organized manufacturing sector

The factors behind the adoption of ISO 14000 certification by Indian organized manufacturing plants are examined using the Annual Survey of Industries unit-level data for 2016–2018, with supplementary analyses undertaken using such data for 2008–2010 and 2008–2015. While observing that a change in the export status of a plant from non-exporting to exporting will raise its probability of adopting ISO 14000 certification by about 20 percent, the paper also identifies that other plant-level characteristics like size, fuel intensity, financial ability, presence of foreign equity, R&D activity, and adequate managerial staff strength are some of the important drivers of the adoption of ISO 14000 certification. The paper finds that while exporting enhances the probability of adoption of ISO 14000 certification, the probability goes down beyond an export share in the production of 80 percent. The paper adds to the literature by disentangling the pecuniary objectives vis-à-vis the role of environmental and social consciousness of plants’ management in driving the adoption of ISO 14000 certification.

Impact of Manufacturing Value Added on Environmental Degradation: empirical evidence from India

In recent years, the manufacturing sector in India has been witnessing a continuous growth in output production due to increase in investment in the sector and the government’s commitment to reduce reliance on imports and boost exports considering the country’s huge domestic market. However, this development is not environmentally friendly as increase in production entails increase in energy consumption, which result in an increased carbon emission that damage the environment. In view of the foregoing situation, this study is set out to investigate the impact of manufacturing value-added on environmental degradation in India over the 1965-2016 period. The study used autoregressive and distributed lag (ARDL) model to achieve its objective. Carbon dioxide emission was used to proxy environmental degradation in the model. In order to serve as control variables in the model, some selected relevant macroeconomic variables such as energy use, trade openness, and economic growth were employed. The estimated result showed that manufacturing value added has positive impact on environmental degradation in India. It infers that the increasing production in the manufacturing sector is degrading the environment through carbon emission. This suggests that an increase in manufacturing sector value added contributes to reducing the quality of environmental in India. Also, the environmental Kuznets curve (EKC) hypothesis was tested and found to be invalid and non-existent. Since the manufacturing sector consumes a lot of energy in its productive activities, the result does not come as a surprise. Thus, we suggest that policymakers in India should apply appropriate measures to improve the quality of the environment through adoption of new technology that will ensure energy efficiency and reduce carbon emission from the country’s manufacturing sector.

Comparing Financial Debt Choices of Existing and New SMEs in Indian Manufacturing Sector

Comparing Financial Debt Choices of Existing and New SMEs in Indian Manufacturing Sector

Economic value-added (EVA) myths and realities: evidence from the Indian manufacturing sector

PurposeThe main aim of this paper is to examine the claim that economic value added (EVA) advocates its superiority over the traditional accounting-based financial performance measures, i.e. profit after tax (PAT), earnings per share (EPS), return on assets (ROA), return on equity (ROE) and return on investment (ROI) in the Indian manufacturing sector and at the same time, give empirical facts. It also tests and examines the information content of various performance measures and their relationship with stock returns.Design/methodology/approachThe paper uses the sample of 534 Indian manufacturing companies from the Bombay Stock Exchange (BSE) during the period 2000–2018. Multiple regression models are applied to examine the information content of EVA and traditional performance measures in explaining shareholders’ returns.FindingsRelative information content tests revealed that traditional accounting-based measures such as EPS, ROE and ROA performed better than EVA in explaining the returns of Indian manufacturing companies. Incremental information content of EVA adds little contribution to information content above traditional performance measures. The claim of superiority of EVA over accounting-based measures in association with shareholder returns is proved invalid in Indian manufacturing companies.Originality/valueThis study concludes that EVA has no superiority over traditional accounting-based financial performance measures in explaining stock returns of Indian manufacturing companies. To achieve heftiness in outcomes, panel data are tested by using Breusch–Pagan–Godfrey (BPG) test for heteroskedasticity, Hausman’s test for fixed and random effect, variance inflation factor (VIF) test for multicollinearity and Durbin–Watson test for autocorrelation.

Investigating the circular supply chain implementation challenges using Pythagorean Fuzzy AHP approach

The business organizations across the globe are comes under the severe threats of unsustainability. The unsustainability issues are arises due to environmental unease such as climate change, global warming, resource scarceness, and ecological degradation. Circular Supply chain (CSC) has gained momentum in the last few years and acts as one of the sustainable and innovative approach for the manufacturing industry. CSC adoption enhances the social, economical, and ecological aspects of the production and supply chain system. However, very less research has been done on the identification and exploration of numerous challenges to CSC implementation in developing nations, particularly, in India. Thus, this research objective is to explore and evaluate the challenges to CSC implementation in the perspectives of Indian manufacturing sector. Total 24 CSC challenges are recognized through literature review and experts input. This research proposes the Pythagorean fuzzy analytic hierarchy process (PF-AHP) technique. This technique is used to prioritize the challenges of CSC adoption based on their relative importance. The empirical example of an Indian case organization is considered for demonstration of the applicability of proposed method. The result reveals that lack of top management support is the most crucial challenge to CSC adoption. This research outcome acts as a stepping stone for industrial practitioners to adopt CSC efficiently, and effectively.

Investment function and the role of export: The case of India's manufacturing sector

This paper examines the relation between investment and exports through a Kaleckian model and highlights the possibility of export-induced growth process despite deterioration in trade balance. The stimulating role of exports is analysed through what is termed as a structurally-biased investment function where domestic demand and exports have different effects on investment rate. There are at least two central features of this investment function. Firstly, exports stimulate growth through the investment channel independent of the direction of change in trade balance. Secondly, in contrast to the Bhaduri-Marglin type investment functions, the sign of profit share coefficient in investment function becomes ambiguous. The structurally-biased investment function is tested and found to be valid for the registered manufacturing sector in India by conducting a panel-data exercise. The coefficient for profit share is found to be statistically insignificant after controlling for the effect of exogenous changes in exports.

Effect of Exchange Rate Volatility on Exports: An Empirical Analysis of Disaggregated Data of the Indian Manufacturing Sector

The effect of real exchange rate volatility on real exports is explored empirically in this article. The study uses disaggregated Indian manufacturing sector data consisting of seven categories: leather & leather manufactures, chemicals and related products, engineering goods, electronic goods, textiles (excluding readymade garments), readymade garments and other manufactured goods. The analysis is focused on India’s quarterly data from 2004Q2 to 2018Q2 using the ARDL bound test procedure. The ARDL bound test results show that real exports are co-integrated with fluctuations in real exchange rates and world real GDP. The study also reveals that exchange rate volatility has mixed effects on manufacturing exports both in the long run and short run. The impact of real-world GDP (WGDP) on real exports has been found positive and significant in the long run except for leather and leather manufacturers where it is negative and significant. In the case of the short-run, real-WGDP has mixed effects on exports. JEL Classification: C22, F14, F31, F1