This thesis aims to provide an explanation for the causes of existence of many low capitalised companies (LCCs) listed on the Bombay Stock Exchange. The main theoretical framework for the thesis is derived from the agency conflicts approach. The agency model examines the relationship between managers and owners and determines managerial effort in a contractual arrangement under asymmetric information. Given the developing nature of the financial and industrial structure in India, the agency conflicts between the different claimants take a different form as compared to that suggested in the traditional agency literature, which is oriented towards developed market economies. Accordingly, the inherent governance structures, which are specific to India and changes initiated by financial reforms of the early 1990s, make a strong case for agency theory to be used as a tool to investigate the peculiarity of Indian stock markets. The dynamics of agency conflicts inherent in the firm structure influences all decisions made in the firm, i.e. debt-equity ratio, dividend policy. It then becomes important to study the impact of the firm's structure on its outstanding equity. This thesis is an attempt at analysing the low average market capitalisation of the BSE from the point of view of owner-managerial behaviour capacitating financial decision-making i.e. how the decision-making of the owner-managers affect the value of the outstanding stock. The existence of many LCCs on the BSE can be analysed by the simple "entry and exit" model of firms into the low capitalised category of the stock market. Among other reasons the entry of firms into BSE was facilitated by relaxation of many stringent bureaucratic policies towards new firms making their maiden public issues. Survival of a firm depends on its performance in the real market and effective monitoring is required to sustain both performance in the market and any improvements thereof. An LCC can move to a different capitalisation category through internal growth and takeovers or mergers. LCCs on the BSE face not only an ineffective outside monitoring (outside shareholders and debt holders) but also non-existent market "exit" mechanisms of takeovers or mergers. Most of the LCCs have exited from the stock exchange through de-listing (if firms fail to pay the listing fees and abide by the rules of the exchange) by SEBI, the regulatory authority. This corroborates to the insufficiency of the market mechanisms of "exit" in changing the status quo of LCCs. This thesis explores the causes behind the non-existent mechanisms of "exit" for LCCs. This thesis proposes that lack of exit mechanisms stem from a market for lemons syndrome. Effective monitoring from outside stakeholders i.e. diffused shareholders is non-existent because of the free rider problem. Whereas block debt holders base their monitoring on the relative position of a particular firm in their portfolio or the importance of a firm to the block debt holder determines the extent of monitoring. Lack of an effective outside monitoring is manifested in the dividend policy, which reflects accumulation of free cash flow used for the personal benefit of owner-managers. Lack of effective monitoring and exit mechanisms have led to the existence of many LCCs and them continuing in the similar status for a long period of time. These hypotheses were established with the help of an interview-based survey of managers working for these firms as well as econometric analysis of their financial data.

Bank supervision in general, and capital adequacy requirements in particular, are concerned fundamentally with bank safety, the stability of the financial system and depositor protection. Bank safety and the stability of the banking and financial system are crucially influenced by the public confidence that depositors and other creditors have in the banks and banking system. Bank capital adequacy is a critical element in generating public confidence in a bank's ability to handle uncertainty and as the ultimate defence against such losses. In this context, capital adequacy regulations by the supervisory authorities have become an increasingly important policy tool to help curb the amount of risk exposure that a bank can assume, thereby helping to preserve public confidence in a bank and the banking system as a whole. Capital adequacy regulations essentially operate on a bank's risk and return profile. This role of capital adequacy requirements is particularly important in Korea. To examine the impact of the new capital adequacy requirements on bank's risk-return profile, an event study methodology was developed. The empirical results using the OLS and SURE estimation indicated strongly that the new capital standards in Korea did not have an impact on bank shareholders' wealth, whereas they had an apparent partial effect on banks' risk, at least perceived by investors in Korea. In addition, no intra-industry effects were found. Our conclusions reveal some policy implications. Firstly, supervisory authorities should reexamine and reassess the present supervisory monitoring system and reestablish it to be appropriate for the new, more vulnerable and competitive (deregulating) financial environment. Secondly, to improve the supervisory monitoring process, the supervisory authorities should enhance the role of the market. Finally, under a environment where the free market is being emphasised in resource allocation, bank supervisors should always consider the simultaneous impact of structural deregulation and supervisory re-regulation within their policy-making process.

Two competing hypotheses with regard to market structure and performance are the traditional structure-conduct-performance (SCP) paradigm and the efficiency hypothesis. This thesis presents results for tests of both hypotheses with respect to the European banking industry using pooled and annual data for the period 1986 to 1989. The cross-sectional and pooled results generally support the traditional SCP paradigm as an explanation for the market behaviour of European banks, with little evidence to suggest that the efficiency hypothesis holds. We also find that changes in market demand conditions, the equity-to-assets ratio and the staff expenses ratio appear to be significant and positively related to banking industry performance. In the majority of cases the loans-toassets ratio exerts a negative influence on banks' profitability. The individual country estimates find evidence that the SCP paradigm unambiguously seems to hold in Belgium, France, Italy, the Netherlands and Spain. These findings are in line with the Price Waterhouse/Cecchini study which identified the same countries, apart from the Netherlands, as the markets which would experience the largest financial service price falls post 1992. As such, these banking markets appear to offer the greatest incentive for new entrants to benefit from (and compete away) high average industry margins. The second part of this thesis adopts a methodology which allows us to test for inter-firm behaviour between leading banks across European bankir- *markets. The initial findings indicate that a large leading bank appears on average to promote cooperation with other leaders and this, on average, increases banking industry profitability. A large second bank, however, seems on average to induce rivalry with leaders rather than cooperation. The impact of more distant rivals does not seem to affect the profitability of banks in the industry. Further investigation of these results however, reveals that there are estimation problems brought about by the way in which the interactive market share variables - which test for cooperation and rivalry - are calculated. The nature in u,iich these variables are constructed implies a collinearity bias when the market shares of the largest firms are of a similar size. As a result, the Kwoka and Ravenscroft (1986) approach adopted to test for cooperative and rivalrous behaviour in European banking may be inappropriate. If we re-specify the model, however, to take account of this collinearity problem, we still observe evidence of duopoly behaviour in European banking thus confirming our earlier findings.

This thesis investigates the main determinants of Italian banks' cost efficiency over the period 1993-96, by employing a Fourier-flexible stochastic cost frontier in order to measure X-efficiencies and economies of scale. Quality and riskiness of bank outputs are explicitly accounted for in the cost function and their impact on cost efficiency levels are evaluated. The results show that mean X-inefficiencies range between 13 and 15 per cent of total costs and they tend to decrease over time for all bank sizes. Economies of scale appear present and significant, being especially high for popular and credit co-operative banks. Moreover, the inclusion of risk and output quality factors in the cost function seems to reduce the level and significance of the scale economy estimates. The sample is also subjected to a profitability test that allows for the identification of banks that are both cost and profit efficient. The results suggest that the most efficient and profitable institutions are more able to control all aspects of costs, especially labour costs. Finally, the data were pooled to carry out a logistic regression model in order to examine bank- and market-specific factors that influence Italian banks' inefficiency. According to these results, inefficiencies appear to be inversely correlated with capital strength and positively related to the level of non-performing loans in the balance sheet. The analysis also shows that there is no clear relationship between assets size and bank efficiency. Finally, from the results it is possible to infer that quoted banks seem to be on average more efficient than their non-quoted counterparts.

This thesis examines the effect of introducing international accounting standards (IASs) on the Jordanian Stock Exchange during the period 1990-1991. Literature on accounting standards in general and IASs in particular is reviewed for the likely effects of IASs adoption in Jordan. A research methodology is developed using data from Jordanian IAS adopting firms (experimental group) and IAS non-adopters (control group) for 1990 and 1991 respectively. Sub-portfolios are then constructed representing the financial sector, the service sector, the industrial sector, low traded firms, heavily traded firms, small firms, large firms, domestic-owned firms, foreign-owned firms, winner firms and loser firms. For all samples and sub samples, abnormal returns (for IAS adopters and non adopters) are analysed using the traditional market model but also using an average return model and a raw return model. The observed market reactions are then compared with those anticipated (or claimed by supporters of IASs adoption in the literature). The main findings are that IASs adoption does increase the information content of financial statements (as observed in abnormal returns) but that reaction occurs mainly prior to accounts release. An exception to this general effect is large firms where IAS adoption does not have an observable effect on abnormal returns around announcement date. The research also provides evidence that IASs adoption has little influence on Jordanian domestic-owned firms' share price reactions but a considerable effect on foreign-owned firms' share prices. The research findings are examined for their relevance for other developing countries considering replacing locally-determined accounting standards with IASs.

The increasing importance of bank prudential regulation in an era of financial liberalization and intense competition, together with the lack of empirical research on capital adequacy in the Spanish banking system, shape the motivation for this study. This research examines the impact of the Spanish bank capital adequacy regulation on capital augmentations (changes in the total amount of the capital) of banking institutions operating in Spain. The period analyzed is 1987-90, during which deregulation and the 1985 risk-based capital requirements have been two major forces in the Spanish banking markets. An empirical model of capital augmentations is developed for Spanish banks. The general model (employing regulatory and book-value capital) for both private and savings banks appears to explain better the capital augmentations of savings banks compared with those of private banks. One of the main findings in this general model is that capital adequacy regulation appears to be a stricter constraint for savings banks. Market-value capital is also employed in the model for the Spanish private banks quoted on the Spanish stock market, but the explanatory power of the model is not improved. When bank size is introduced into the analysis, the results appear to indicate that larger banks might have certain advantages in terms of capital ratios and in terms of capital augmentations. The findings of this research have implications for the role of the market in regulating capital adequacy, for the deregulation - reregulation framework of banking, the economic desirability of 'functional' (versus institutional) supervisory regulation of banks, and for the competitive neutrality of bank legislation.

This thesis examines whether the valuation relevance of earnings andlor cash flow is moderated by the consistency or the various combinations of signals provided by their unexpected surprises. This prediction is motivated by the expectation that consistent signaling of surprises in both measures will improve the perceived reliability of each. Another prediction is that the volatility of accruals determines the extent to which the consistency between earnings and cash flow surprises affects stock prices. The informativeness of the accounting measures of performance is evaluated by ascertaining whether they cause investors to change their evaluation of its fair value and adjust the share price accordingly. The existence of the predicted interaction effects is then examined by including interaction terms in the model specification as regressors. The tests are applied to a unique data set that addresses the issue of survivorship bias. Our results confirm that earnings and cash flow are not evaluated in isolation of each other in the market place. In particular, investors are seen to relate cash flow to earnings to assess the reliability of cash flow data. The extent to which this occurs, however, depends on the volatility of accruals. Finally, it should be emphasised that the more supportive results are provided after controlling for survivorship bias, which constrains the generalisability of prior research findings in this area.

The purpose of this thesis has been to investigate evidence of economies of scale and scope in various European banking markets. The thesis has also examined the cost implications from hypothetical bank mergers both within the French, German, Italian and Spanish banking markets and cross-border in the EU. The analysis has been prompted by claims that substantial cost savings could be expected as the result of the EU's single market programme in the banking area. Economies of scale and scope, a substantial part of industrial organisations literature, have been widely examined in the US banking system, although little empirical work to date has been undertaken on European banking markets. This thesis aimed to rectify this imbalance in the literature by providing a detailed, in-depth and original analysis of scale and scope economies as well as investigating the cost implications of hypothetical bank mergers. Overall, the results suggest noticeable differences in cost characteristics across European banking markets and strong evidence of economies of scale and scope at the plant (or branch) level in all but the Spanish market. Cost savings appear to occur mainly through the increased average size of established banks' branches rather than through adding new branches. The findings appear to indicate that scale and scope economies will be important in generating economic gains to EU banking markets under the Single Market programme. The evidence from hypothetical mergers within the individual domestic banking markets appears to be that mergers between large banks can generate substantial cost savings or increases depending on the particular merger partners. In general, the results indicate that opportunities for cost saving mergers seem to be greater in Germany and Spain than in the French and Italian banking markets. The prospects for cost saving big-bank mergers in Italy, appear to be limited. The selective results for the hypothetical mergers between the 20 largest banks within domestic banking markets imply that substantial cost savings can be generated from mergers between top commercial banks in Germany. For the Italian banking market, the analyses shows that the majority of hypothetical mergers indicate an increase in predicted total costs. Moreover, the findings from Spain and France are less clear-cut. The evidence from our analysis of hypothetical cross-border mergers in the EU indicates only limited opportunities for costs saving from big bank mergers and that such mergers are more likely to result in an increase in total costs.

This thesis examines the structure-performance relationship in the three largest European banking markets (U.K, France and W. Germany) and also investigates the related areas of economies of scale and X-efficiency. In Chapter 2, we describe the structure of the financial systems in the U.K, France and W. Germany identifying the different types of banks operating in each country and presenting the balance sheet structure of banks (by type of institution). In Chapter 3, we discuss the pre-1993 regulatory regimes prevailing in the three countries under investigation and we set out all measures and banking regulations proposed (E.0 Directives and Recommendations) to achieve the Single European Market in financial services. Chapter 4 contains a literature review of the s-c-p model and its applications to different banking markets. Chapter 5 investigates the nature of the relationship between market structure and bank profits and net interest margins. We adopt the theoretical framework introduced by Hannan (1991) and we suggest that total bank profits and net interest margins are a positive function of the level of concentration in every market the banks operate in. Overall, our results indicate that, at least in certain cases, various market shares do positively affect bank performance measures (bank profitability and net interest margins), suggesting that size in particular market segments may be important in generating higher bank profits. In Chapter 6, we empirically investigate the issue of economies of scale by estimating a standard translog cost functional form. Our empirical findings suggest that economies of scale are present across a broad range of outputs in all three banking markets under investigation, indicating that there are cost advantages associated with greater bank size. Chapter 7 tests the efficient structure hypothesis which suggests that bank efficiency rather than concentration is the factor that positively influences both market shares and bank profits. This hypothesis is tested by incorporating two measures of efficiency (X-efficiency and scale efficiency) directly into our s-c-p model. We estimate X-efficiency and scale efficiency using the stochastic cost frontier approach. Our results suggest that the two efficient structure variables do not help in the explanation of the variability of bank profits and, therefore, we find no evidence to support the efficient structure hypothesis. Finally, Chapter 8 presents our conclusion, suggests some policy implications and identifies the limitations of our study.

<p> As the need for cost-efficient, talented teams continues to grow, leaders often consider the use of globally dispersed teams, also defined as virtual teams. Despite the apparent benefits, the unique needs of virtual team members are often overlooked in general leadership, change management, and retention discussions. Leaders need to understand contributing factors to the attrition of virtual workers. The foundation for this research included theories of employee retention and change management. The research question for this qualitative phenomenological study focused on the lived experiences of current or former virtual financial services workers regarding job retention. Participants were chosen using purposeful sampling resulting in the selection of 15 individuals who had worked on a virtual financial services team within the past 3 years. The researcher used open-ended interview questions to report the lived experiences of virtual team members related to attrition, retention, and change. The researcher used the phenomenological descriptive approach for the analysis. A combination of hand coding and coding software revealed recurring themes. Themes from the results of the study included challenges of the virtual environment, leadership improvements, productivity impacts resulting from disengagement of the leader, and improvement of communication strategies. Suggestions for further research include frequency of communication, leadership training, team member selection, and further theory development for virtual leaders. The impact to positive social change occurs when virtual workers are satisfied in their role, thus impacting their ability to provide for their family, engage more frequently in activities within their community, and contribute to the success of the company.</p><p>