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Quality of Management and Its Influence on Market Valuation: A Study of the Indian Pharmaceutical Industry

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  • Shireen Rosario
  • Chandra Sen Mazumdar

Abstract

This paper aims to highlight the relevance of the quality of management in the well-being of a firm and its influence on market valuation. The study which is based on the Indian Pharmaceutical Industry, measures and employs the quality of Management and directorship, together with the Return on Capital Employed (ROCE), to assess the influence on market valuation and the efficiency of assets employed. The study employs forty companies that are listed on the Bombay Stock Exchange, for a period of 12 years from the fiscal year 2008-09 to 2019-20. Through Path Analysis, it is established that ROCE, Quality of management, and Directorship in that order influence the market valuation which is represented by the Q ratio. ROCE & Dividends impact the efficiency of assets under use, which is represented by the Asset Turnover Ratio (ATO).

Suggested Citation

  • Shireen Rosario & Chandra Sen Mazumdar, 2023. "Quality of Management and Its Influence on Market Valuation: A Study of the Indian Pharmaceutical Industry," Academic Journal of Interdisciplinary Studies, Richtmann Publishing Ltd, vol. 12, January.
    • Handle: RePEc:bjz:ajisjr:2346
    DOI: https://doi.org/10.36941/ajis-2023-0013
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    References listed on IDEAS

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    1. Vasia Panousi & Dimitris Papanikolaou, 2012. "Investment, Idiosyncratic Risk, and Ownership," Journal of Finance, American Finance Association, vol. 67(3), pages 1113-1148, June.
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