Papers by Srinivas Nippani
International journal of financial studies, Feb 26, 2024
Afro-Asian journal of finance and accounting, Dec 31, 2022
American Business Law Journal, Mar 1, 2022
The recent disbursement of COVID‐19 pandemic‐related federal relief funds to businesses and indiv... more The recent disbursement of COVID‐19 pandemic‐related federal relief funds to businesses and individuals under the CARES Act exposed significant problems in the U.S. system of money and payments. U.S. banks' wealth maximization objectives clashed with the federal government's goals of diversity, equity, and inclusion (DEI). The discriminatory, self‐interested behavior of banks, which essentially served as the federal government's long arm in these transactions, worsened the pandemic‐induced economic crisis for many, especially women and minorities, and intensified racial injustice. The U.S. government's inability in 2020 to successfully execute its stimulus plan and give all its intended recipients the benefits it had designated due to the role played by banks begs the question: Should U.S. banks be subject to any legal obligations when they help the government execute its fiscal goals? This article argues that U.S. banks should help advance the federal government's fiscal policy, including the DEI social agenda, especially during critical junctures such as the economic crisis instigated by COVID‐19, and proposes an agency theory approach to mandate the implementation of government social policy goals among commercial banks via a CAMELS rating‐like system that includes social goals, such as DEI. This DEI rating system would create public consequences for noncomplying banks, including depositors withdrawing their funds from lower‐rated banks and redepositing them in top‐rated banks, resulting in higher‐rated DEI banks overtaking lower‐rated banks. This DEI rating system will also provide an incentive for banks to compete for more diversity and inclusion, which would solve many of the systemic discrimination‐related issues that led to economic inequality and intensified the 2020–2021 crisis. Lastly, DEI‐based scores could help prevent banks from finding themselves on the losing side of the growing public banking movement in the United States, enabling banks to reposition themselves and avoid future radical changes in the banking industry.
The Quarterly Review of Economics and Finance, May 1, 2009
In this paper, we extend his work by showing that total business inventory has a significant impa... more In this paper, we extend his work by showing that total business inventory has a significant impact on the non-financial commercial paper yields. We use regression analysis for studying the relationship between inventories and their impact on the spread between commercial paper and Treasury bills. Our results have implications for money market arbitrage, monetary policy, working capital management for corporations and stock valuation.
American Journal of Business, Oct 28, 2005
The enactment of Riegle‐Neal IBBEA in 1994 encouraged bank mergers and acquisitions. Empirical ev... more The enactment of Riegle‐Neal IBBEA in 1994 encouraged bank mergers and acquisitions. Empirical evidence indicates that large banks benefited from IBBEA enactment. However, there is little, if any, evidence of the impact of the act on small banks’ profitability relative to large banks. This study examines the impact of IBBEA on the performance of small banks in the period preceding and following IBBEA implementation. Evidence is presented that indicates the return on assets of small banks was significantly less than that of larger banks in the post‐IBBEA period. This is contrary to the results of the pre‐IBBEA period when small banks’ profitability was competitive with and in some cases even better than large banks’ profitability. It is concluded that the enactment of IBBEA has placed small banks at a competitive disadvantage which could eventually lead to their demise.
Applied Financial Economics, Oct 15, 2004
... stock markets? SRINIVAS NIPPANI* and KENNETH M. WASHER ... This is contrary to the numerous r... more ... stock markets? SRINIVAS NIPPANI* and KENNETH M. WASHER ... This is contrary to the numerous reports in the popular press predicting that SARS would have a tremendous impact on the economies of these severely affected countries. ...
Applied Financial Economics, May 1, 2009
This article investigates Day-of-the-Week and January Effects in the Shanghai and Shenzhen stock ... more This article investigates Day-of-the-Week and January Effects in the Shanghai and Shenzhen stock markets over the period 1990 to 2006 for both the ‘A’ and ‘B’ indices. During this period, these two Chinese stock markets went through the limit period and nonlimit period and then again through a limit period. We examine the seasonality effects both during the different periods and also over the whole period. Our results indicate that the Shanghai A index is prone to higher volatility and also shows some January and Weekend Effects.
The Quarterly Review of Economics and Finance, Aug 1, 2010
Some African economies have experienced increases in the level of their foreign exchange reserves... more Some African economies have experienced increases in the level of their foreign exchange reserves as well as increases in their import volume. Theory suggests that as the level of exchange reserves increases, it may affect the demand for imports since more funds will be available for imports. This paper examines import demand behavior in three African economies, namely Kenya, Nigeria and South Africa. An empirical analysis of import demand behavior is presented, based on the dynamic error-correction model, which allows an explicit parameterized division of effects into long-run influences, short-term adjustment and error-correction term. It uses econometric techniques organized around Johansen and Harris-Inder cointegration analyses; fully modified OLS, dynamic OLS and non-linear OLS to estimate long-run import demand functions. Published by Elsevier B.V. on behalf of The Board of Trustees of the University of Illinois.
Portuguese Economic Journal, Jan 7, 2021
In the study we test the theory that financial markets can provide relevant information about for... more In the study we test the theory that financial markets can provide relevant information about forthcoming corporate events. More specifically, we examine the ability of trading volume to predict dividend changes in a sample of 880 dividend announcements from Iberian firms for the period 2005–2018. We document evidence of a positive and significant relation between unusually high volume and subsequent dividend changes. The results based on panel data regressions with control variables for firm size, profitability measures, volatility and average turnover using both pooled OLS method and fixed effects method are robust. Our results are of special interest to those investors that exhibit a higher preference for dividends.
International journal of economics and finance, Jun 2, 2017
This study seeks to address the question if the 2016 U.S. Presidential election and Mr. Donald Tr... more This study seeks to address the question if the 2016 U.S. Presidential election and Mr. Donald Trump's path to U.S. presidency affected the stock market returns in China. We do not find conclusive results from three leading stock indices of China, SHCOMP, SZCOMP, and SHSZ300. There is an immediate impact shown in SHSZ300, but not in SHCOMP and SZCOMP. We ascribe this to the impact of less sophisticated investors who dominate the stock market in China and also to that country's censorship of the media wherein the government could effectively either block or downplay the unfavorable information.
Managerial Finance, Aug 9, 2011
PurposeThe purpose of the paper is to check for reverse weekend effect in the Canadian stock mark... more PurposeThe purpose of the paper is to check for reverse weekend effect in the Canadian stock market.Design/methodology/approachT‐tests, non‐parametric tests and regressions were employed.FindingsThere is reverse weekend effect in the Canadian stock market. Canadian stocks are shown to exhibit the traditional weekend effect prior to 1988, dissipating after that year until 1998 and then reversing to become the first non‐US market for which a reverse weekend effect is found.Originality/valueThis is the first paper on the Canadian stock market looking at reversal.
Managerial Finance, Aug 9, 2011
ABSTRACT Purpose – The purpose of this paper is to examine the day-of-the-week effect for three p... more ABSTRACT Purpose – The purpose of this paper is to examine the day-of-the-week effect for three primary money market instruments in Canada. The sample period is 1980-2009. Design/methodology/approach – The authors use three approaches. First, a parametric t-test is employed to determine if a particular day-of-the-week mean return is significantly different from zero, using both a full sample and a trimmed sample. Next, the Wilcoxon signed ranked test is utilized to assess whether the median weekday return is different from zero for each day. Lastly, a binary regression model is used to test if Monday's mean return is different from other days. Findings – The traditional Monday effect is prevalent in the 1980s for corporate paper and treasury bills (TB), but not for bankers acceptances (BA). In the 1990s, the Monday effect disappears completely. However, in the 2000s the Monday effect reappears, but is positive (it reverses) for both corporate paper and BA. The authors also find strong support for Wednesday being a high return day, which concurs with related money market studies. Research limitations/implications – While the results are statistically significant, the economic significance is dubious. This study helps market participants in that it shows that they need to allow for distinct day-of-the-week patterns when using yield spreads. Practical implications – One practical implication for practitioners is to time purchases of Canadian money market securities for Monday when returns are low (relying on the results of the full sample period). Issuers should time sales for non-Mondays when returns are higher and yields are lower. Originality/value – This study is original in that it is the first one to analyze day-of-the-week effects in the Canadian money market. The authors compare the results to studies that focus on the US market.
Journal of Financial and Quantitative Analysis, Jun 1, 2001
ABSTRACT The chain of events that led to the disagreement between the White House and Congrees ov... more ABSTRACT The chain of events that led to the disagreement between the White House and Congrees over the increase of the federal debt limit from mid-October 1995 to March 1996 caused a default potential for Treasury securities. We examine the effect of this event chain on the yield spread between commercial paper and Treasury bills and find that both the three-and six-month yield spreads were reduced during the event period. The results suggest that the market charged a default risk premium to the Treasury securities. There is no evidence that these events had a sustained effect on T-bill rates since the yield spread during the post-event period resumed its pre-event level.
RePEc: Research Papers in Economics, Apr 1, 2009
Journal of Entrepreneurship Education, 2020
The purpose of this paper is to examine the issues that occurred as part of the worldwide problem... more The purpose of this paper is to examine the issues that occurred as part of the worldwide problem created by the COVID-19 situation and its impact on teaching the subject of entrepreneurial finance. By staying up-to-date and relevant, professors could use the resources available to them to show how entrepreneurs survive and thrive in this scenario. While the spring 2020 semester presented a unique challenge to both professors and students, professors who embrace it and the succeeding semesters as an opportunity to grow can benefit themselves and their students in general. Professors can continue to use COVID-19 examples in their entrepreneurial finance classes for the near future. The paper is based on the experience of teaching the course and not empirical data, and relevant to professors teaching the course in the United States.
Afro-Asian journal of finance and accounting, 2017
One of the more popular methods of risk analysis in capital budgeting is the certainty equivalent... more One of the more popular methods of risk analysis in capital budgeting is the certainty equivalent method. In this paper, we discuss the major drawbacks of using this method, and strongly argue in favour of the risk-adjusted discount rate method. The calculation of certainty equivalent factors, the use of risk-free rate as the discount rate, the reinvestment rate assumption and the practical problems for multinational corporations for using the certainty equivalent method are discussed. We also discuss the concept of cost of capital and its role in relation to the use of the two methods of risk analysis.
The Journal of Fixed Income, Jun 30, 2012
This article extends the recent studies of Liu et al. [2009] and Nippani and Smith [2010] that sh... more This article extends the recent studies of Liu et al. [2009] and Nippani and Smith [2010] that show that both short-term and long-term Treasury securities now include a default risk premium. Using a regression model that includes the spread between SWAPs and Treasury securities of different maturities, it is shown that the term structure of Treasury securities now exhibits default risk premia. These premia vary across time and maturity. Evidence from forward rates supports the conclusion and also allows one to estimate the timing of the default risk problems.
Managerial Finance, Aug 8, 2016
Purpose – Several articles in the popular press have detailed an end-of-year anomaly known as the... more Purpose – Several articles in the popular press have detailed an end-of-year anomaly known as the Santa Claus Rally, a period best defined as the last five trading days of December and the first two trading days of January. The purpose of this paper is to examine US stock market returns over this period from 1926 to 2014. Design/methodology/approach – The authors examine the Santa Claus Rally by relating it to firm size in the stock markets of the USA. The Santa Claus Rally consists of the last five trading days in December and the first two in January. The authors use t-tests, non-parametric test and regression analysis to determine if investors in small firms get superior returns over the period 1926-2014. Findings – The authors find that returns are generally higher during the period and that the effect is considerably stronger for small-firm portfolios relative to large capitalization portfolios. The authors also provide convincing evidence that the three most important trading days (especially for small stock portfolios) are the last trading day in December and the first two trading days in January. Research limitations/implications – The authors only check the markets in the USA. Market makers can use this to get significantly high returns during the Christmas-New Year period. The study shows for the first time that there is a size effect as part of the Santa Claus Rally. Practical implications – This is the first study to show that Santa Claus Rally exists for a long time in the USA. It is the first study to show that there is a size effect in Santa Claus Rally. Market participants could get significantly higher returns by investing or being invested in the stock market during this period. Social implications – The impact of the holiday season on stock market returns. Originality/value – This is the first major academic study to examine Santa Claus Rally in this much detail. The authors not only show that the rally exists, the authors show that it is based on firm size and has been in existence for nearly 90 years in the USA.
The Quarterly Review of Economics and Finance, Sep 1, 2004
In order to minimize short-term financing costs, corporations issue commercial paper instead of s... more In order to minimize short-term financing costs, corporations issue commercial paper instead of seeking bank loans. We examine the changes in the daily rates of commercial paper over the last two decades. Our most interesting finding is based on a consistent and significant negative return on Wednesdays as compared to other weekdays over the sample period. We use t-tests, non-parametric tests and the binary regression developed by French [J. Finan. Econ. 8 (1) (1980) 55] to confirm our results. Finally, we deduct the return for each Wednesday from the average return for that week and find that Wednesday returns are significantly lower. Consistent with other money market instruments like T-bills and federal funds, we show that a day-of-the-week effect exists in the commercial paper rates.
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Papers by Srinivas Nippani