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

Shireen  Rosario; Chandra Sen  Mazumdar

doi:10.36941/ajis-2023-0013

Authors

Shireen Rosario PhD Scholar, MS Ramaiah University of Applied Sciences, Lecturer, College of Commerce & Business Administration, Dhofar University, PB 2509, Salalah 211, Oman
Chandra Sen Mazumdar Assistant Professor, Department of Management Studies, MS Ramaiah University of Applied Sciences New BEL Road, Bengaluru, India

DOI:

https://doi.org/10.36941/ajis-2023-0013

Keywords:

Management, Directors, Valuation, Market

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).

Received: 03 October 2022 / Accepted: 23 December 2022 / Published: 5 January 2023