Dissertations / Theses on the topic 'Return on capital employed (ROCE)'

Thesis (MComm)--Stellenbosch University, 2012.
ENGLISH ABSTRACT: Do firms that have low dependence on physical assets as well as high profitability outperform companies with the opposite characteristics in the market? Despite the lack of empirical research, conventional wisdom would suggest that they should. Conceptually, investors should prefer profitable companies to less profitable companies, and lower capital-intensive to high capital-intensity firms. Using a large sample of global stocks over the period from 1988 to 2010, the effect of using capital intensity and return on capital employed (ROCE) as filters for portfolio inclusion was investigated. A quantitative research approach was followed in this study. This involved dividing the sample into five subsets, or quintiles, according to the specific metric (for example capital intensity). The total return of an equally weighted portfolio was then measured for each quintile for the subsequent 12 months. The portfolio was rebalanced annually and the subsequent 12-month return recorded. Because enhanced performance on new capital investments may take longer than 12 months to be reflected in share prices, quintile performance was also measured over five-year holding periods. The empirical findings of this study reveal that there was no discernible pattern of outperformance by low capital-intensive quintiles using annual rebalancing. However, the lowest capital-intensive firms had the highest average returns using five-year holding periods. The highest ROCE firms performed best with annual rebalancing and with five-year holding periods. Combining both capital intensity and ROCE, a portfolio focused on low capital intensity and high profitability produced a compound annual growth rate that is 9.18 percentage points higher than a portfolio focused on the highest capital intensity and the lowest ROCE. Over five-year holding periods there is a distinct outperformance by low capital-intensive firms with high operational profitability. These results indicate that allocation of investment capital to capital-intensive companies with low operational profitability seems likely to impair long-term returns, and there may be value in a focus on low capital-intensity firms that are able to generate high returns on capital employed.
AFRIKAANSE OPSOMMING: Sal maatskappye met lae afhanklikheid van fisiese bates, asook hoë winsgewendheid, maatskappye met die teenoorgestelde eienskappe uitpresteer in die mark? Ten spyte van ‘n gebrek aan empiriese navorsing, sal konvensionele wysheid voorstel dat dit so moet wees. Beleggers behoort winsgewende maatskappye bo minder winsgewende maatskappye te verkies, en laer kapitaalintensiewe bo hoë kapitaalintensiewe maatskappye. Die gebruik van kapitaalintensiteit en opbrengs op kapitaal aangewend (OOKA) in die beleggingsbesluit word ondersoek deur gebruik te maak van ‘n groot steekproef globale aandele oor die tydperk 1988 tot 2010. 'n Kwantitatiewe navorsingsbenadering was gevolg in die studie. Dit het die verdeling van die steekproef in vyf onderafdelings, of kwintiele, volgens die spesifieke maatstawwe (byvoorbeeld kapitaal-intensiteit) behels. Die totale opbrengs van 'n gelyk-geweegde portefeulje is vervolgens gemeet vir elke kwintiel vir die daaropvolgende 12 maande. Die portefeulje is jaarliks herbalanseer en die daaropvolgende 12 maande se opbrengs is aangeteken. Omdat verbeterde prestasie op nuwe kapitaalbeleggings langer kan neem as 12 maande om in aandeelpryse weerspieël te word, is kwintiel prestasie ook oor vyf jaar hou periodes gemeet. Die bevindinge van hierdie studie dui daarop dat daar geen beduidende verbetering in prestasie onder laer kapitaalitensiewe kwintiele oor een jaar houperiodes was nie. Die laagste kapitaalintensiewe maatskappye het egter oor ‘n hou periode van vyf jaar die hoogste gemiddelde opbrengs gelewer. Die hoogste OOKA maatskappye het die beste gevaar met jaarlikse herbalansering en met 'n houperiode van vyf jaar. 'n Portefeulje gefokus op lae kapitaalintensiteit en hoë winsgewendheid het 'n saamgestelde jaarlikse groeikoers gelewer wat 9,18 persentasiepunte hoër was as 'n portefeulje gefokus op die hoogste kapitaalintensiteit en die laagste OOKA. Oor houperiodes van vyf jaar was daar duidelike uitprestering deur lae kapitaalintensiewe ondernemings met hoë operasionele winsgewendheid. Hierdie resultate dui daarop dat die toekenning van beleggingskapitaal aan kapitaalintensiewe maatskappye met lae operasionele winsgewendheid waarskynlik langtermynopbrengste benadeel en dat 'n fokus op lae kapitaalintensiteit maatskappye, wat in staat is om 'n hoë opbrengs op kapitaal te genereer, moontlik meer lonend kan wees.

The purpose of the study is to examine if the gender composition of a board has an effect on a company’s financial performance by analyzing their operating margin and return on capital employed (ROCE). The study is based on a quantitative method, studying companies listed on the Stockholm Stock Exchange. Previous research has not been studying the gender composition of boards of Swedish companies and its effect on the company's financial performance in regard to their operating margin and return on capital employed. Therefore, this study has examined that in order to draw a conclusion regarding its possible effects. The data that is collected will be used as support in the analysis in order to understand how the current composition and effects are connected. This study will contribute with knowledge for companies in Sweden regarding gender composition of boards and the possible effects on their financial performance. But also, as support for the ongoing discussion regarding board composition and the current inequality in gender representation. In conclusion the study shows that return on capital employed and the proportion of women in the board has a positive relationship. Meaning that the bigger proportion of women in a board, the better return on capital employed the company has. However, for operating margin there was not a significant relationship and therefore a conclusion regarding that cannot be made.

Despite its significance for industrial economics, utility regulation and competition policy, the measurement of the economic profitability of a firm remains a relatively underresearched area. The difference between the Accounting Rate of Return (ARR), measured on a net replacement cost or current cost basis, and a firm's estimated risk adjusted cost of capital is favoured by many economic researchers and is widely employed in utility regulation, but strong claims have been made for Tobin's q (q - the ratio of the market value of a firm's securities to the cost of replicating the firm, often identified with the net replacement cost of its net assets). Both measures have shortcomings. Davis and Kay have drawn attention to, but have failed to fully explain, a bias in ARR when firms buy in goods and services. Bias in q due to the omission of hidden capital can be significant. In this paper, economic profitability is identified with a firm's input-output ratio expressed in present value terms, and with the internal rate of return on a firm's expenditure in the accounting year, both revenue and capital. In the case of ex Post profitability, the last two measures are shown to be equivalent. Departures from the form of these ideal measures explains the biases in both ARR and q. Employing the Capital Asset Pricing Model, two alternative, operational measures of a firm's economic profitability are derived from the ideal measures with a view to eliminating the biases in q and ARR. The ex post measure is called here the Return on Total Capital Employed (ROTCE) and the ex ante measure is called here modified Tobin's q (modq). ROTCE is appraised using data from a simple corporate model. modq is appraised using data extracted from the accounts of companies comprising the Buildings Materials and Food Manufacturing sectors of the FTA All Share Index. In this study, I/modq and 1/q are shown to be significantly correlated at the 95t confidence level, and some 45k of the difference between them can be associated with taxation effects. Associating market power with the product of Beta and the Return on Sales, 1/modq is found to be significantly related at the 95t confidence level with market power and wages deflated by market value.

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MBA Professional Report
Approved for public release, distribution is unlimited
The purpose of this MBA Project is to provide a Return on Capital Employed model for Naval Dental Center Gulf Coast (NDCGC) resource managers. The model will enable the resource managers to evaluate financial and personnel assets appropriate for each dental clinic and to allocate assets as deemed necessary based on those results. NDCGC is required to report the Return on Investment (ROI) of each branch dental clinic (BDC) to the Bureau of Medicine and Surgery on a quarterly basis. NDCGC has made an effort to calculate return on assets, but there has been little understanding of the source of the income, cost and assets valuation data used in the equation. NDCGC has recognized over the past fiscal year that using the measure of Return on Capital Employed (ROCE) vice ROI will give them the assessment of alternatives to optimize the use of resources. NDCGC has requested that a model be developed to analyze ROCE at each BDC. A breakdown and analysis of the ROCE equation will enable NDCGC to provide all BDCs with proper recommendations based on the outcomes of the study on ROCE's effectiveness. This project was conducted with the sponsorship and assistance of Naval Dental Center Gulf Coast.

Thesis (M.B.A.)--Naval Postgraduate School, December 2003.
"MBA professional report"--Cover. Thesis advisor(s): Joseph G. San Miguel, Don E. Summers. Includes bibliographical references (p. 35). Also available online.

To be able to understand future firm performance it is important to recognize and correctly evaluate what constitutes a signal. This study investigates if provisions contain signalling value regarding future firm performance. The study is conducted on firms listed on the Nasdaq OMX Stockholm from 2001 to 2010, constituting a sample of 2173 firm years. All the provision data has been manually collected from each of the firm’s annual reports. By using both univariate and multivariate analyses, the study provides new evidence regarding the association between provisions and firm performance. The findings indicate that firms who recognise restructuring provisions experience a performance improvement. The performance improvement is tied to the size of the restructuring provision i.e. the signal. Warranty and litigation provisions show no indications of having any relation to future firm performance. Thus, large restructuring provisions contain a signal of performance improvement, whereas warranty and litigation provisions do not. The thesis contributes to existing literature by providing new insight of how provisions functions as signals of firm performance

Empirical research findings on the consequences of post-M&A performance have generated several result, although most of which are inconsistent. The relation of such post-M&A performances to non-listed and listed companies can be relative especially when considering the companies economic and financial structure and other prevailing factors associated to the host country. However, most of these have been attributed to the choice of performance measurement indicators. This paper analyses and evaluates existing performance indicators that have been employed in the literature. It is argued that to overcome the limitations found in financial indicators of performance, a need to pursue multiple measures of performance in post-M&A research is needed. It also argues that the motives for the transaction should also be included as performance indicators. This hybrid approach will allow researchers and practitioners to measure the overall success of merger and acquisitions.

The growing lack of confidence in public companies arises from the recent accounting scandals and corporate collapses, which have been attributed to the consequences of separation of ownership and control in modern firms. Agency theory predicts a conflict of interest between managers and shareholders that leads to agency costs and weak performance. This study used agency, stakeholders', and stewardship theories as the theoretical framework and multiple regression analysis to examine the relationship between corporate governance mechanisms and organizational performance in nonfinancial firms listed on the Nigerian Stock Exchange. The results of the study could help clarify understanding of corporate governance to managers, investors, and regulators who seek to understand how corporate governance impact firms' performance. In this study, corporate governance mechanisms included board independence, audit committee independence, board size, number of board meetings, and executive compensation. The data were collected from the firms' published accounts on their websites and on the archives of the Nigerian Stock Exchange for a period starting from January 1, 2011 to December 31, 2015. The measures of financial performance in the study were return on assets, return on capital employed, and Tobin's Q. The study found a positive but not statistically significant relationship between corporate governance mechanisms and financial performance. This study has implications for positive social change by showing managers and other stakeholders of firms how a good corporate governance system assures investor confidence, employee loyalty and commitment, the reduction in conflict of interest and agency costs, and a strong financial performance.

Syfte: Syftet med studien är att undersöka om det finns något sammanband mellan hållbarhetsarbete och lönsamheten hos de företag som är noterade på Nasdaq OMX Stockholm.    Metod: För att uppnå syftet med studien har en kvantitativ metod använts. En tvärsnittsdesign har varit grunden för de statistiska undersökningarna. Den empiriska data som har samlats in är av sekundär art där hållbarhetsarbetet har operationaliserats med hjälp av Folksam index för året 2013. Måtten på företagens lönsamhet består av nyckeltalen avkastning på eget kapital, avkastning på sysselsatt kapital och vinstmarginal. Dessa mått är inhämtade från företagens årsredovisningar från räkenskapsåret 2015. Vidare har den insamlade data analyserats med hjälp av deskriptiv statistik, Pearsons korrelationstest och linjära regressioner. Resultat & slutsats: Studiens resultat visar hur ett positivt samband finns mellan samtliga nyckeltal som berör den finansiella lönsamheten i företagen och dess redovisade hållbarhetsdata. Avkastningen på eget kapital har ett svagt positivt samband med en signifikansnivå på 0,05. Avkastning på sysselsatt kapital har ett svagt positivt samband där signifikansnivån 0,1 analyserades. Vinstmarginalen har det starkaste sambandet med en förklaringsgrad på 52,1 procent och en signifikansnivå på 0,01. Förslag till fortsatt forskning: Ett förslag till vidare forskning är att göra en studie under en längre period, men även att jämföra hållbarhetsarbete inom Europa. Den nya lagen som träder i kraft under 2017 är även en intressant ståndpunkt. Detta för att se hur det kan påverka sambandet mellan hållbarhetsarbete och lönsamhet.   Uppsatsens bidrag: Denna studies praktiska bidrag visar hur sambandet mellan noterade företag hållbarhetsarbete och lönsamhet ser ut. År 2013 var de ungefär 226 företag som redovisade sitt hållbarhetsarbete vilket även utformar studiens population. Det teoretiska bidraget i denna studie är att se vilket samband hållbarhetsarbete och lönsamhet verkligen har och studien berör tre olika mått på företagens finansiella prestation. Samt om det förekom ett positivt, negativt eller neutralt samband mellan den beroende och oberoende variabeln.
Aim: The aim of this study is to investigate whether there is a relationship between sustainability performance and profitability of the companies listed on Nasdaq OMX Stockholm. Method: In order to achieve the aim of the study a quantitative method used. A cross-sectional design has been the basis of the analyses. The empirical data that have been collected from the secondary nature in which sustainability work has been operationalized with the help of Folksam Index for the year 2013. The dimensions of financial performance consist the keywords, return on equity, return on capital employed and profit margin. These measurements are obtained from annual reports from the year of 2015. Furthermore, the collected data were analyzed using descriptive statistics, Pearson correlation test and linear regressions. Results & Conclusions: Our results demonstrate how a positive correlation exists between all the key figures relating to the financial profitability of businesses and its reported sustainability data. Return on equity has a weak positive correlation with a significance level of 0.05. After the analyze return on capital employed has a weak positive correlation with significance level of 0.1. The profit margin has the strongest relationship with an explanation rate of 52.1 percent and a significant correlation at a significance level of 0.01. Suggestions for future research: A proposal for further research is to make a study for a longer period, but also to compare the different European countries CSR. The new law that takes effect in 2017 is also an interesting position to see how it affects the relationship between CSR and corporate profitability during a specific timeline. Contribution of the thesis: This study practical contribution shows how the relationship between listed companies' sustainability performance and profitability looks. In 2013 it was approximately 226 companies that reported its sustainability work and these companies are the population in this study. The theoretical contribution of this study was to see what connection work on sustainability and profitability, indeed, and the study involves three different measures of corporate financial performances. If there was a positive, negative or neutral relationship between the dependent and independent variable.

The hypothesis claims that full service carriers (FSCs) will be forced to change their operating models. Additionally, the trends which form aviation market of the future are explored. The investigation is based on a financial assessment of ten important airlines incorporated in four different regions across the globe, between 2005 and 2014. According to the findings the trend of liberalization will continue, thus FSCs will continue losing market share to low cost carriers (LCCs) and as such, they will be made to change the way they operate in order to survive. The future aviation market is defined by a reshuffle of demand towards emerging countries, further rationalization of operating models and consolidation.

Denna studies syfte var att analysera sex nyckeltal och se vilka samband dessa hade på riskbuffert sysselsatt kapital. Studien utfördes på 796 små byggbolag i Sverige under perioden 2009–2016 med hjälp av en binär logistisk regressionsanalys. Som teoretisk referensram användes working capital management och finansiell oro. Studien resulterade i att kapitalets omsättningshastighet, skuldränta och rörelsekapital/totala tillgångar uppvisade signifikanta negativa samband med riskbuffert sysselsatt kapital. Räntetäckningsgrad och avkastning på totalt kapital resulterade i signifikanta positiva samband med riskbuffert sysselsatt kapital. Skuldsättningsgrad resulterade intressant nog i ett icke signifikant negativt samband. Slutligendiskuterades byggbolagens sannolikhet för finansiell oro utifrån respektive nyckeltal.
The aim of this study was to examine the relation between six independent key ratios with riskbuffer on capital employed. The study was conducted on 796 small construction enterprises in Sweden during 2009–2016 with a binary logistic regression model. As theoretical framework, working capital management and financial distress was applied. The study concluded that the capital turnover rate, interest payable and working capital to total assets had significant negative relations with riskbuffer on capital employed. However, the interest cover ratio and return on total assets were both significant positively related withriskbuffer on capital employed. Debt-to-equity ratio resulted interestly enough in a nonsignificant negative relation. Lastly, with regards taken to every respective key ratio, the probability of financial distress among the construction firms was discussed.

This diploma work assess the financial health of the company in the years 2002–2006 on the basis of selected methods of the financial analysis. It includes proposals of possible solutions of identified problems which should result in the improvement of financial situation of the firm in the following years.

Return on Capital Employed (ROCE) is a popular financial instrument and communication tool for the appraisal of companies. Often, companies management and other practitioners use untested rules and behavioural approach when investigating the key determinants of ROCE, instead of the scientific statistical paradigm. The aim of this dissertation was to identify and quantify key determinants of ROCE of individual companies listed on the Johannesburg Stock Exchange (JSE), by comparing classical multiple linear regression, principal components regression, generalized least squares regression, and robust maximum likelihood regression approaches in order to improve companies decision making. Performance indicators used to arrive at the best approach were coefficient of determination ( ), adjusted ( , and Mean Square Residual (MSE). Since the ROCE variable had positive and negative values two separate analyses were done. The classical multiple linear regression models were constructed using stepwise directed search for dependent variable log ROCE for the two data sets. Assumptions were satisfied and problem of multicollinearity was addressed. For the positive ROCE data set, the classical multiple linear regression model had a of 0.928, an of 0.927, a MSE of 0.013, and the lead key determinant was Return on Equity (ROE),with positive elasticity, followed by Debt to Equity (D/E) and Capital Employed (CE), both with negative elasticities. The model showed good validation performance. For the negative ROCE data set, the classical multiple linear regression model had a of 0.666, an of 0.652, a MSE of 0.149, and the lead key determinant was Assets per Capital Employed (APCE) with positive effect, followed by Return on Assets (ROA) and Market Capitalization (MC), both with negative effects. The model showed poor validation performance. The results indicated more and less precision than those found by previous studies. This suggested that the key determinants are also important sources of variability in ROCE of individual companies that management need to work with. To handle the problem of multicollinearity in the data, principal components were selected using Kaiser-Guttman criterion. The principal components regression model was constructed using dependent variable log ROCE for the two data sets. Assumptions were satisfied. For the positive ROCE data set, the principal components regression model had a of 0.929, an of 0.929, a MSE of 0.069, and the lead key determinant was PC4 (log ROA, log ROE, log Operating Profit Margin (OPM)) and followed by PC2 (log Earnings Yield (EY), log Price to Earnings (P/E)), both with positive effects. The model resulted in a satisfactory validation performance. For the negative ROCE data set, the principal components regression model had a of 0.544, an of 0.532, a MSE of 0.167, and the lead key determinant was PC3 (ROA, EY, APCE) and followed by PC1 (MC, CE), both with negative effects. The model indicated an accurate validation performance. The results showed that the use of principal components as independent variables did not improve classical multiple linear regression model prediction in our data. This implied that the key determinants are less important sources of variability in ROCE of individual companies that management need to work with. Generalized least square regression was used to assess heteroscedasticity and dependences in the data. It was constructed using stepwise directed search for dependent variable ROCE for the two data sets. For the positive ROCE data set, the weighted generalized least squares regression model had a of 0.920, an of 0.919, a MSE of 0.044, and the lead key determinant was ROE with positive effect, followed by D/E with negative effect, Dividend Yield (DY) with positive effect and lastly CE with negative effect. The model indicated an accurate validation performance. For the negative ROCE data set, the weighted generalized least squares regression model had a of 0.559, an of 0.548, a MSE of 57.125, and the lead key determinant was APCE and followed by ROA, both with positive effects.The model showed a weak validation performance. The results suggested that the key determinants are less important sources of variability in ROCE of individual companies that management need to work with. Robust maximum likelihood regression was employed to handle the problem of contamination in the data. It was constructed using stepwise directed search for dependent variable ROCE for the two data sets. For the positive ROCE data set, the robust maximum likelihood regression model had a of 0.998, an of 0.997, a MSE of 6.739, and the lead key determinant was ROE with positive effect, followed by DY and lastly D/E, both with negative effects. The model showed a strong validation performance. For the negative ROCE data set, the robust maximum likelihood regression model had a of 0.990, an of 0.984, a MSE of 98.883, and the lead key determinant was APCE with positive effect and followed by ROA with negative effect. The model also showed a strong validation performance. The results reflected that the key determinants are major sources of variability in ROCE of individual companies that management need to work with. Overall, the findings showed that the use of robust maximum likelihood regression provided more precise results compared to those obtained using the three competing approaches, because it is more consistent, sufficient and efficient; has a higher breakdown point and no conditions. Companies management can establish and control proper marketing strategies using the key determinants, and results of these strategies can see an improvement in ROCE.
Mathematical Sciences
M. Sc. (Statistics)

The present study is an attempt to analyze the impact of changing policy regime during the liberalization era on the behaviour of 81 sample firms in Indian electronics industry in terms of factor productivities. We categorise a period of 12 years (1993-2004) as the two phases of liberalisation: - Period/ Phase 1: 1993-1998 and Period/ Phase 2: 1999-2004. The 81 sample firms are segregated into four primary sub-sectors of electronics industry based on their use pattern: communication equipments, computer hardware, consumer electronics and other electronics. The objective is to trace the growth of output in the four sub-sectors in Indian electronics industry over two phases of liberalisation and to determine the relative contributions of Input Growth (IG) and Total Factor Productivity Growth (TFPG) to Output Growth (OG). Further, the study focuses on determining the relative contributions of Technological Progress (TP) and Technical Efficiency Change (TEC) to TFPG and establishes the influence of firm specific managerial decision making and management efficiency variables on TEC and TP. The methodology follows a three-step approach in order to achieve the above objectives. The first step is to determine a potential stochastic production function using stochastic frontier production function model and measure firm-wise technical inefficiency levels. The second step is to measure the growth of TFP over two phases and to derive the components TEC and TP. The third step measures the influence of management decision variables on TEC and TP using a frontier approach model on a panel data. The contribution of labour to output was found to be higher than the contribution of capital in all four sub-sectors. However, capital contribution improved in phase 2 relative to phase 1 for computer hardware and other electronics sub-sectors. Computer hardware was the only sub-sector that experienced an improvement in returns to scale from constant returns to scale in phase 1 to increasing returns to scale in phase 2 of liberalisation. The Technological Progress (TP) and Technical Efficiency Change (TEC) that contributed to TFPG exhibited a contrasting relationship for all the four sub-sectors in the electronics industry: TEC declined when there was high TP while it improved when there was a decline in TP. This could be because Indian electronics firms generally focus on either technology imports/ develop indigenous technology to achieve TP or to assimilate the imported/ indigenous technology for better use. The lag in assimilation of imported/ developed technology could be a reason for the negative relation between TEC and TP. The communication equipment sub-sector had a balanced growth in terms of TEC and TP among the four sub-sectors. The computer hardware and the other electronics sub-sectors were worse performers in terms of TEC in period 2 relative to period 1 and so had been the electronics industry as a whole. The computer hardware sub-sector had the highest average OG in period 2 relative to period 1 among all the sub-sectors due to relatively high contribution of IG. Other electronics sub-sector had the highest average TP that compensated for the negative average TEC. On an average, percentage contribution of TP to TFPG was high for the electronics industry and its sub-sectors in period 2 relative to period 1. This is an indication that the sub-sectors of Indian electronics industry have strived and achieved steady technological progress in the period of economic liberalisation to cope with the intensifying competition internally as well as externally. The sample firms in the electronics industry were in favour of towards external acquisition of sophisticated technology, which explains the relatively high contribution of TP to the TFPG of the industry. However, this was not followed up with adequate in-house R&D in order to develop indigenous technology or to absorb imported technology as a result of which TEC for the sub-sectors and the whole industry suffered. Growth in Operating Margin (OMG) and Growth in Returns on Capital Employed (ROCEG) generate additional revenue that could be ploughed back into the firm for improvement of its existing indigenous technology or absorption of imported technology thereby leading to improvement in TE and TP. The positive influence of OMG as well as ROCEG on TEC and TP for all the sub-sectors is an indication of efficient management in these sub-sectors in utilizing assets and profits to generate earnings. However, the trend of operating margin and returns on capital employed had been declining for all the sub-sectors. Inventory management proved to be costly for TP as financial resources diverted to maintain inventory had an undesirable effect on their indigenious technology. Most of the sample firms in the electronics industry were found to have incurred R&D expenditure to derive tax incentives. As a result the resources got diverted away from other creative operational or skill improvement efforts to unproductive and wasteful R&D activities. Thus, R&D did not have the desirable influence on the components of TFPG. The present study showed that unplanned and ad hoc technology imports or even raw material imports was not conducive to the growth of both the components of TFPG. Older firms need to develop their technology or adequately import better and more sophisticated technology. This would enable older (more experienced) electronic firms to overcome the negative influence of age, reflected in our analysis. This is, however, applicable to only those segments of the electronics industry where firms preferred to serve lower end of the market as well as lower end of the technological spectrum (eg. Computer hardware and other electronics sub-sectors). Electronics industry like any other capital goods industry offers scope for vertical integration. Management of the firms in electronics industry should emphasize on vertical integration, expansion of scale of operations and should initiate R&D investments to build up R&D base, among others to improve TEC and TP. This would also help to check the decline in operating margin and returns from invested capital among the firms. Thus, improved managerial effectiveness and decision making do help in the form of generating thereby surpluses facilitating to achieve higher TP and even TEC. Regional and State governments should provide adequate policy support and appropriate industrial infrastructure to electronic firms which would in turn improve their managerial effectiveness and TFPG.

Emerging markets such as India have witnessed waves of domestic and cross-border mergers and acquisitions. This historical analysis, which consists of two parts, tests central tenets of resource dependence theory. The first part entails an analysis of the transition in public policy governing corporations between 1991 and 2005. The second part tests hypotheses derived from resource dependence theory relating to a firm’s decision to acquire. The analysis explores the factors that explain why firms engage in mergers and acquisitions by examining three specific policy periods (i.e., 1991-1996, 1997-2001 and 2002-2005). The findings from the historical analysis suggest that firms did not merely react to the conditions (i.e., constraints on capital) in their environment by undertaking merger and acquisition activity, but attempted to alter them as resource dependence theory suggests. Findings from the event history logit model also support resource dependence theory. Overall, the study shows that merger and acquisition activity increased during a period of intense deregulation (i.e., 1991-2005) brought about by the adoption of neo-liberal reforms, change to the multilayer subsidiary form, deregulation of the banking and financial sectors’ and reforms in foreign direct investment and equity markets. During this period of uncertainty, firms controlling more resources in terms of earnings, efficiency and number of subsidiaries were more likely to undertake acquisition activity as they have leverage in organization-environment relationships. The effect of number of subsidiaries on acquisition activity was the most consistent across policy periods’. This dissertation is organized in the following manner: Following the introductory chapter, Chapter II is a historical examination of the three policy periods and includes an analysis of the effect of the political-legal environment on mergers and acquisitions between 1991 and 2005. Chapter III reviews the propositions of resource dependence theory that pertain to organizational change and presents research hypotheses related to mergers and acquisitions. Chapter IV describes the data, measurement and methodology employed in the quantitative analysis. Chapter V presents the findings from the quantitative analysis and discusses the results. The concluding chapter (Chapter VI) includes a presentation of the theoretical findings and discussion of the limitations and scope of the study.