This issue contains three papers. The first paper, “International Market Selection
Criteria for Emerging Markets”, by Thomas Buerki, Anup Nandialath, Ramesh
Mohan and Stephanie Lizardi, examines how companies look at international expansion when considering the emerging markets. Based on a literature review, the authors identify 11 distinct criteria which companies can use to evaluate an international market. The analysis shows that foreign market experience, social capital and political stability are the most important criteria for emerging markets and must receive more attention from managers. Customer receptiveness was found to be a less important criterion in such situations as is geographic distance between home and the target market. Respondents in the study agreed that the attractiveness of emerging markets had to be evaluated differently from that of high-income countries. The study is unique in that it looks at how managers must evaluate expansion when considering emerging markets, whilst past studies concentrated mostly on the developed markets. The study though has its limitations when it comes to sample size and characteristics.
The second paper, “The Long-Term Success of Mergers and Acquisitions”, by Amporn Soongswang, makes an inquiry into the long-term success of mergers and acquisitions. Taking firms listed on the Stock Exchange of Thailand, the study investigates the impact of takeovers on target and bidding firms. Investigating the long-window abnormal return of 12 months before and after the announcements of the results, the study shows that target firm’s shareholders gain substantially and positive abnormal returns, while bidding firm’s shareholders realize positive rather than negative abnormal returns. The total gains were positive at 25.48%, explaining why takeovers create value for shareholders. Matched reference portfolio method was used for the estimation of long-term abnormal returns for the target and bidding firms’ shareholders. The study is unique in terms of the methodology adopted as it focuses on the long-term results when compared to many previous studies that have just used daily stock price data and short window abnormal returns. The study adds to the literature on emerging markets in this specific area.
The final paper, “Profitability Trends in Selected Textile Companies in India: A Cross-Sectional Analysis”, by Sk. Mujibar Rahaman and Debasish Sur, examines the profitability trends in the Indian textile companies. The textile industry in India occupies a very important place in terms of its size and contribution to the economic growth. India earns about 30% of its total foreign exchange through textile exports. The Indian textile industry contributes nearly 14% of the total industrial production, around 3% to the GDP of the country, and provides gainful employment to millions of people. Hence, its financial health is an important prerequisite. In this study, the authors investigate the most influential determinants of overall profitability of the sample companies and examine the relationship between the overall profitability of the selected companies and their efficiency in managing fixed assets and working capital. Profitability was assessed using simple averages of profitability like Gross Profit Ratio (GPR), Operating Profit Ratio (OPR), Net Profit Ratio (NPR), Return on Capital Employed (ROCE), Return on Net Worth (RONW) and Earnings Per Share (EPS), as well as their degrees of consistency during the study period. Results from the 18 companies selected from the ‘Business World 500’ listing shows that fixed assets management, inventory and receivables management helped in improving their overall profitability during the period 2002 – 2012.
Automated Teller Machines (ATMs): The Changing Face of Banking in India
Bank Management
Information and communication technology has changed the way in which banks provide services to its customers. These days the customers are able to perform their routine banking transactions without even entering the bank premises. ATM is one such development in recent years, which provides remote banking services all over the world, including India. This paper analyzes the development of this self-service banking in India based on the secondary data.
The Information and Communication Technology (ICT) is playing a very important role in the progress and advancement in almost all walks of life. The deregulated environment has provided an opportunity to restructure the means and methods of delivery of services in many areas, including the banking sector. The ICT has been a focused issue in the past two decades in Indian banking. In fact, ICTs are enabling the banks to change the way in which they are functioning. Improved customer service has become very important for the very survival and growth of banking sector in the reforms era. The technological advancements, deregulations, and intense competition due to the entry of private sector and foreign banks have altered the face of banking from one of mere intermediation to one of provider of quick, efficient and customer-friendly services. With the introduction and adoption of ICT in the banking sector, the customers are fast moving away from the traditional branch banking system to the convenient and comfort of virtual banking. The most important virtual banking services are phone banking, mobile banking, Internet banking and ATM banking. These electronic channels have enhanced the delivery of banking services accurately and efficiently to the customers. The ATMs are an important part of a bank’s alternative channel to reach the customers, to showcase products and services and to create brand awareness. This is reflected in the increase in the number of ATMs all over the world. ATM is one of the most widely used remote banking services all over the world, including India. This paper analyzes the growth of ATMs of different bank groups in India.
International Scenario
If ATMs are largely available over geographically dispersed areas, the benefit from using an ATM will increase as customers will be able to access their bank accounts from any geographic location. This would imply that the value of an ATM network increases with the number of available ATM locations, and the value of a bank network to a customer will be determined in part by the final network size of the banking system. The statistical information on the growth of branches and ATM network in select countries.
Indian Scenario
The financial services industry in India has witnessed a phenomenal growth, diversification and specialization since the initiation of financial sector reforms in 1991. Greater customer orientation is the only way to retain customer loyalty and withstand competition in the liberalized world. In a market-driven strategy of development, customer preference is of paramount importance in any economy. Gone are the days when customers used to come to the doorsteps of banks. Now the banks are required to chase the customers; only those banks which are customercentric and extremely focused on the needs of their clients can succeed in their business today.
